Jack Macdowell, Jr.
About Jack Macdowell, Jr.
Jack L. Macdowell, Jr. is Chief Investment Officer of Chimera Investment Corporation (CIM), joining upon CIM’s acquisition of The Palisades Group on December 2, 2024. He co-founded Palisades in 2012 and served as Managing Member and CIO, leading investment activities, research, asset allocation, and risk management; prior roles include CIO at Carrington Capital Management, Senior Portfolio Manager at Old Hill Partners, and investment banking positions in asset securitization at RBC Capital Markets and Credit Suisse First Boston. He is a CFA charterholder, earned a BBA from The University of Texas at Austin, served on the Board of Trustees for Vertical Capital Income Fund (VCIF), and is a member of the Executive Council of the Texas McCombs Real Estate Center and formerly on the Board of CFA Society Austin . Company performance metrics used to calibrate executive pay include Relative ROE and Relative Economic Return for annual cash bonuses, and Relative TSR and Relative Economic Return for long-term PSUs; for the 2024 period, CIM ROE was ~23.6% (2nd of 32 in iShares Mortgage REIT ETF) and Relative Economic Return ~15.46% (5th of 32), driving NEO cash bonuses of 166–189% of target, while 2022 PSUs earned 62.4% of target on relative economic return of ~-17.56% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Palisades Group | Co-founder, Managing Member & CIO | 2012–2024 | Led investment activities, research, asset allocation, and risk management across residential credit strategies . |
| Carrington Capital Management | Chief Investment Officer | — | Oversaw investment strategy, quantitative analysis, mortgage credit analytics, trading, and risk management . |
| Old Hill Partners | Senior Portfolio Manager | — | Managed investments in mortgage- and asset-backed securities . |
| RBC Capital Markets; Credit Suisse First Boston | Investment banking, Asset Securitization Group | — | Focused on non-agency mortgage and manufactured housing securitizations . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Vertical Capital Income Fund (VCIF) | Board of Trustees | — | Governance oversight at NYSE-listed closed-end fund . |
| CFA Society Austin | Board member (former) | — | Professional standards, network leadership in CFA community . |
| UT Austin McCombs Real Estate Center | Executive Council member | — | Industry-academic engagement in real estate finance . |
Fixed Compensation
| Component | 2024 | 2025 Target | Notes |
|---|---|---|---|
| Base Salary ($) | $60,484 | — | Joined Dec 2, 2024; 2025 base salary not disclosed . |
| Annual Cash Bonus ($) | $69,672 (prorated entitlement, voluntarily waived) | $850,000 target; 0–200% payout range | Bonus program tied to Relative ROE, Relative Economic Return, and strategic goals . |
| Long-Term Incentive (LTI) ($) | $0 (no 2024 LTI grants) | $1,400,000 target; 0–200% PSUs plus fixed RSUs | LTI mix: 50% RSUs (time-based), 50% PSUs (performance-based) . |
Performance Compensation
| Metric | Weighting | Target Framework | Actual (2024) | Payout (2024) | Vesting Schedule |
|---|---|---|---|---|---|
| Annual Cash Bonus – Relative ROE | 35% | Peer-relative vs iShares Mortgage REIT ETF; cap if Company ROE ≤ 0 | ~23.6% Company ROE; rank 2/32 | NEO payouts 166–189% of target; Macdowell waived bonus | Cash; earned for 2024 . |
| Annual Cash Bonus – Relative Economic Return | 35% | Peer-relative vs iShares Mortgage REIT ETF; cap tied to Company Economic Return | ~15.46% Company Relative Economic Return; rank 5/32 | NEO payouts 166–189% of target; Macdowell waived bonus | Cash; earned for 2024 . |
| Annual Cash Bonus – Strategic Goals | 30% | Individual strategic objectives | Achieved (components contributed to 166–189% payouts) | As above | Cash; earned for 2024 . |
| LTI PSUs – Relative Economic Return | 50% of PSU grant | 0–200% payout over three-year LTI period | 2024 grants earned over 2024–2026; 2022 PSU outcome 62.4% of target on -17.56% RER (prior plan) | 0–200% at 3-year end | Cliff vest Dec 31, 2026, subject to performance & continued employment . |
| LTI PSUs – Relative TSR | 50% of PSU grant | 0–200% payout over three-year LTI period | Earned over 2024–2026 | 0–200% at 3-year end | Cliff vest Dec 31, 2026, subject to performance & continued employment . |
| LTI RSUs – Time-based | 50% of LTI | Fixed RSU dollar-to-share conversion via VWAP; time vesting | Granted to NEOs in Jan 2024 (none for Macdowell in 2024) | N/A (time vesting) | 1/3 vests annually on Dec 31, 2024/2025/2026 . |
Design features: one-year employment terms auto-extend; max annual cash multiple 200% of target; incentives balanced across one- and three-year horizons, with heavy equity weighting and clawback policy .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (CIM common) | 222,088 shares; <1% of class; as of April 10, 2025 . |
| Vested vs unvested | No outstanding RSU/PSU awards shown at 12/31/2024 for Macdowell (no 2024 LTI grants) . |
| Options | No option awards disclosed; program utilizes RSUs/PSUs . |
| Pledging/Hedging | Prohibited by policy; hedging and pledging transactions not permitted . |
| Ownership guidelines | 3x salary for NEOs (5x CEO); must retain 100% of shares until guideline met, applies until 6 months post-termination . |
Employment Terms
- Start date and role: Employment agreement effective upon closing on December 2, 2024; joined as Chief Investment Officer; required to relocate to NYC metro within three months of closing .
- Agreement term: One-year employment agreements that auto-renew annually, consistent with 2023 redesign and 2024 practice; Macdowell’s agreement became effective Dec 2, 2024 .
- Severance (as of 12/31/2024 assumptions): Termination without cause/good reason: $1,600,000 cash plus ~$48,690 other benefits; CIC termination: $3,200,000 cash plus ~$73,034 other benefits; no values for accelerated equity (none outstanding); no tax gross-ups .
- Change-in-control: Double-trigger vesting; no single-trigger upon CIC if awards are assumed .
- Clawback: Recovery of annual and long-term incentive compensation upon restated financials .
- Perquisites: No executive perquisites; standard benefits (401k, health, life insurance) .
- Related party transaction: Earnout tied to Palisades Designated Contracts (up to $20M over five measurement periods through 12/31/2029), with up to 50% payable in CIM shares at the company’s election; Macdowell owns 100% of Palisades Holdings I, LLC (70% of Seller); approved by Audit Committee under related party policy .
Compensation Structure Analysis
- Increased equity weight and capped cash leverage: Post-2023 redesign emphasizes stock-based variable pay, with long-term stock awards averaging ~52% of total compensation for NEOs; annual cash bonus capped at 200% of target .
- Performance metric calibration: 2024 annual bonus shifted to Relative ROE and Relative Economic Return plus strategic goals; PSUs tie to Relative TSR and Relative Economic Return over three years, aligning with mortgage REIT value drivers .
- Governance enhancements and consultant independence: FW Cook advises compensation committee; no other services provided .
- Macdowell 2024 decisions: Voluntarily waived prorated cash bonus; received no 2024 LTI grants given December start, limiting near-term selling pressure from vesting .
Multi-Year Compensation (Macdowell)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | $60,484 | $69,672 (waived) | $0 | $0 | $0 | $130,156 |
| 2025 Target | — | $850,000 target (0–200%) | $1,400,000 LTI target (RSUs/PSUs) | — | — | — |
Equity Awards Outstanding (as of 12/31/2024)
| Name | RSUs Unvested (#) | RSUs Market Value ($) | PSUs Unvested (#) | PSUs Market/Payout Value ($) |
|---|---|---|---|---|
| Jack L. Macdowell, Jr. | — | — | — | — |
Performance & Track Record
- 2024 strategic execution: Completed acquisition of Palisades; sponsored $468M securitization of seasoned reperforming mortgages; added fee-based income; managed leverage prudently (GAAP debt-to-equity and recourse leverage 4.0:1 and 1.2:1, respectively) .
- Investor materials: Transaction rationale emphasized diversification of fee-based income, scale, and private credit adjacency; upfront consideration $30M with up to $20M earnout; Macdowell assumed CIO role upon closing .
Compensation Committee Analysis
- Committee oversight and independence: All independent directors; FW Cook engaged; CEO excluded from own pay decisions .
- Say-on-Pay responsiveness: 2023 employment agreements redesigned following 2022 say-on-pay feedback; one-year terms, greater equity weight, capped cash bonus multiple .
Equity Ownership & Beneficial Holders
| Holder | Shares | % of Class |
|---|---|---|
| Jack L. Macdowell, Jr. | 222,088 | <1% |
| All directors & officers (10) | 1,184,002 | 1.46% |
| Top institutional holders (BlackRock, Vanguard, Thornburg) | 7,458,512; 7,549,270; 4,952,655 | 9.2%; 9.32%; 6.12% |
Risk Indicators & Red Flags
- Related party earnout: Macdowell’s ownership link to the seller and earnout contingent on Designated Contracts revenue introduces potential conflict; mitigated by Audit Committee approval and option to settle up to 50% in stock to align interests .
- No hedging/pledging permitted: Reduces misalignment risk; strong retention via ownership guidelines and share retention until compliance .
- Severance caps and double-trigger: Generally 1.0–2.0x salary+bonus severance; double-trigger for CIC; no 280G tax gross-ups .
Employment & Contract Highlights
| Term | Provision | Detail |
|---|---|---|
| Term length | Auto-renewing one-year terms | Applied across NEOs; Macdowell’s agreement effective Dec 2, 2024 . |
| Location | Relocation | Required to relocate to NYC metro within three months of closing . |
| Severance | Without cause/good reason | $1,600,000 cash + ~$48,690 COBRA/benefits; continued vesting of PSUs per terms (none outstanding for Macdowell at YE2024) . |
| Severance | CIC termination | $3,200,000 cash + ~$73,034 COBRA/benefits; double-trigger vesting; no single-trigger if awards assumed . |
| Clawback | Policy | Recovery of incentive comp upon restatement . |
| Perquisites | Policy | No executive perquisites; standard benefits . |
Investment Implications
- Alignment and retention: Heavy performance-based mix (cash tied to Relative ROE/Economic Return; PSUs tied to Relative TSR/Economic Return) and double-trigger CIC support alignment; clawback and hedging/pledging prohibitions reduce governance risk .
- Limited near-term selling pressure: Macdowell had no 2024 LTI grants and waived his 2024 bonus; share retention until ownership guideline compliance further dampens near-term selling risk .
- Watch the earnout pathway: The five-year earnout linked to Palisades Designated Contracts and Macdowell’s prior ownership creates incentives around fee revenue growth; stock-settled earnouts may align interests but monitor audit committee oversight and disclosures for potential conflicts .
- Pay-for-performance credibility: 2024 outcomes show strong ROE and relative economic return translating into high bonus payouts for NEOs, reinforcing incentive effectiveness; Macdowell’s 2025 targets ($850k cash, $1.4m LTI) put material at-risk pay on multi-year metrics tied to TSR and economic return .