Phillip J. Kardis II
About Phillip J. Kardis II
President, Chief Executive Officer, and Director of Chimera Investment Corporation (CIM). Age 63 as of June 10, 2025; CEO since December 2022 and President since March 2024; previously Chief Legal Officer & Secretary (September 2015–December 2022) . Education: BA and MA (George Washington University), MA (George Mason University), JD (Georgetown University Law Center); recognized expertise in mortgage REITs and structured transactions; led CIM’s securitization, financing, and investment structuring, and served on the Valuation and Investment Committees . 2024 performance under his leadership: Company ROE ~23.6% (2nd/32 iShares Mortgage REIT peers) and Relative Economic Return ~15.46% (5th/32), driving above-target annual bonus outcomes; Say‑on‑Pay approval exceeded 92% in 2024 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Chimera Investment Corporation | Chief Executive Officer | Dec 2022–present | Led strategy execution; oversaw securitizations/financing; sector‑leading ROE/Economic Return in 2024 . |
| Chimera Investment Corporation | President | Mar 2024–present | Executive leadership alongside CEO role . |
| Chimera Investment Corporation | Chief Legal Officer & Corporate Secretary | Sep 2015–Dec 2022 | Key architect of securitization, financing, and investment transactions; leadership on Valuation and Investment Committees . |
| K&L Gates LLP | Partner | 2004–2015 | Represented mortgage REITs and mortgage credit platforms, including CIM . |
| U.S. Department of Commerce; Rockwell International; U.S. Senate Committee on the Budget; Analytic Services, Inc. | Various roles | n/a | Early‑career roles contributing to policy, corporate, and analytic experience . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Public company directorships (outside CIM) | None disclosed | n/a | No other public boards disclosed for Kardis in the 2025 proxy . |
Fixed Compensation
| Year | Base Salary |
|---|---|
| 2024 | $850,000 |
Additional structure/context:
- CEO pay ratio: 25.2x (CEO $6,790,329 vs median employee $269,500) .
- Pay mix emphasizes performance; for the CEO, 58% of target total direct compensation is performance‑based .
Performance Compensation
2024 annual cash bonus design (paid Dec 1, 2024–Jan 30, 2025):
- Weighting: 35% Relative ROE (capped by absolute ROE), 35% Relative Economic Return (capped by absolute ER), 30% strategic goals .
- Results: ROE ~23.6% (97th percentile); Relative Economic Return ~15.46% (87th percentile); Kardis’ strategic goals scored at 200% .
- Payout: Kardis earned $3,302,163 vs $1,750,000 target (annual bonus payouts ranged 166%–189% of target across NEOs) .
| Metric (Annual) | Weight | Target definition | Actual (2024) | Payout mechanics |
|---|---|---|---|---|
| Relative ROE (cap by absolute ROE) | 35% | Percentile vs iShares Mortgage REIT ETF constituents; threshold is lesser of 2‑yr UST+100 bps or 25th percentile | ~23.6% Company ROE; 97th percentile | 0–200% of target, capped at 100% if absolute ROE ≤0 . |
| Relative Economic Return (cap by absolute ER) | 35% | Percentile vs iShares Mortgage REIT ETF; threshold is lesser of 2‑yr UST+100 bps or 25th percentile | ~15.46%; 87th percentile | 0–200% of target, capped at 100% if absolute ER ≤0 . |
| Strategic goals | 30% | Committee‑assessed executive objectives | Kardis: 200% | 0–200% discretionary based on goals . |
Long‑term incentives (granted 1/17/2024):
- RSUs (Fixed LTI): $1,400,000 grant; 91,150 RSUs; vest ratably over 3 years (12/31/2024, 12/31/2025, 12/31/2026) .
- PSUs (2024–2026 LTI): $1,400,000 target; 91,150 target PSUs; vest based 50% on Relative Economic Return and 50% on Relative TSR vs iShares Mortgage REIT ETF; 0–200% payout; cliff vests after 3‑year period (settlement by March 15 following period) .
- Prior PSU outcome: 2022 PSUs (Oct 2021–Sep 2024) vested at 62.4% of target; Kardis earned 6,728 shares vs 10,782 target .
| 2024 LTI component | Target value | Instruments | Grant size | Performance/vesting |
|---|---|---|---|---|
| Fixed LTI (RSU) | $1,400,000 | RSUs | 91,150 shares | Ratable vest over 3 years; DERs accrue, paid if vested . |
| Performance LTI (PSU) | $1,400,000 | PSUs | 91,150 target PSUs | 3‑year Relative ER and Relative TSR vs iShares Mortgage REIT ETF; 0–200% payout; cliff vest at end of performance period . |
Equity Ownership & Alignment
- Beneficial ownership: 470,168 shares; <1% of class .
- Deferred Stock Units (DSUs) credited (vested, deferred): 187,731 DSUs (not included in beneficial ownership; paid in shares at distribution) .
- Insider‑alignment policies:
- Ownership requirement: 5x base salary for CEO; must be maintained until six months after termination; unvested time‑based RSUs count, unvested PSUs do not .
- Anti‑hedging/pledging: Prohibits hedging and pledging; executives/directors may not hold CIM securities in margin accounts or pledge as collateral .
- Clawback: NYSE‑compliant recovery policy adopted November 2023 for erroneously awarded incentive comp after restatements .
Outstanding unvested awards (12/31/2024):
| Award type | Grant date | Unvested units | Market value (12/31/2024) |
|---|---|---|---|
| RSU | 1/1/2022 | 4,998 | $69,973 . |
| RSU | 3/27/2023 | 30,729 | $430,212 . |
| RSU | 1/17/2024 | 65,449 | $916,287 . |
| PSU (2023–2025) | 3/27/2023 | 92,188 (assumed at target) | $1,290,625 . |
| PSU (2024–2026) | 1/17/2024 | 196,346 (assumed at 200% for table disclosure) | $2,748,850 . |
Deferred compensation program dynamics:
- Executive Officer Stock Award Deferral Plan terminated Nov 5, 2024; liquidation scheduled for Nov 30, 2025, with all outstanding executive deferrals paid at that time per tax rules (potential share delivery event) .
- Kardis’ deferred comp balance (12/31/2024): $2,443,843 (driven by deferred stock awards; includes period earnings) .
Employment Terms
Key structure (one‑year employment agreements, auto‑renewal unless notice; design refreshed in 2023 and continued in 2024):
- Bonus design: Max 200% of target; annual cash aligns to ROE, Economic Return, and individual goals; LTI split 50% RSUs (time‑vest) / 50% PSUs (3‑yr Relative ER/TSR) .
- Severance (non‑CIC): 1.0x (base + greater of target cash bonus or 3‑yr average cash bonus); RSUs accelerate; PSUs continue subject to performance; 12 months COBRA .
- Severance (CIC double‑trigger): 2.0x (base + greater of target cash bonus or 3‑yr average cash bonus); RSUs accelerate; PSUs continue subject to performance; pro‑rata annual bonus; 18 months COBRA .
- Non‑compete and non‑solicit: 12 months post‑employment; confidentiality and non‑disparagement apply .
- No 280G tax gross‑ups; no single‑trigger vesting upon CIC if awards assumed .
Estimated payout values for Kardis as of 12/31/2024:
| Scenario | Severance/Payment | Equity acceleration/continuation | Other benefits | Total |
|---|---|---|---|---|
| Death | — | $4,081,523 | $73,034 | $4,154,557 . |
| Disability | — | $4,081,523 | $73,034 | $4,154,557 . |
| Termination w/o Cause or for Good Reason | $4,057,096 | $4,081,523 | $48,690 | $8,187,308 . |
| CIC double‑trigger | $8,114,192 | $4,081,523 | $73,034 | $9,603,698 . |
Board Governance
- Board service: Elected Class III director on December 10, 2022; nominated in 2025 to shift to Class II director (term through 2027) to balance classes .
- Roles and independence: CEO and director; not independent (employee). Chairman is independent (Gerard Creagh); roles of CEO and Chair separated—Board states this supports independence and effective oversight .
- Committee memberships: All standing committees (Compensation, Audit, Nominating & Corporate Governance, Risk) are fully independent; Kardis is not listed as a member of any committee .
- Board activity and attendance: 21 Board meetings in 2024; independent directors held 7 executive sessions; all directors attended ≥75% of meetings/committees during their service periods in 2024 .
- Director compensation: Only independent directors are paid; employee directors (including the CEO) receive no additional director compensation .
Performance & Track Record
Selected 2024 operating and strategic highlights:
- Sponsored $468 million securitization of seasoned reperforming residential mortgages; acquired The Palisades Group; engaged in hedging shifts (converted $1.5B swaptions to swaps at ~3.56% pay‑fixed, covering ~69% floating liabilities); maintained recourse leverage 1.2:1 and GAAP D/E 4.0:1; raised ~$140 million senior notes at 9.13% weighted coupon .
- Compensation committee assigned 200% to Kardis’ strategic goals component, citing leadership in strategy, execution, and Palisades acquisition .
- Pay‑versus‑performance framework discloses ROE 23.6% and 2024 TSR index value $73.80 (Value of $100 framework) .
Compensation Committee Analysis and Shareholder Feedback
- Independent consultant FW Cook advised on design, peer benchmarking (17‑company group maintained in 2024) .
- Program emphasizes variable, multi‑metric, capped payouts; ownership/retention and clawback policies in place; Say‑on‑Pay support exceeded 92% at the 2024 annual meeting .
Investment Implications
- Alignment: CEO pay tightly linked to Relative ROE, Relative Economic Return, and Relative TSR; 2024 results (2nd in ROE, 5th in Economic Return) supported an above‑target cash payout and robust LTI framework; anti‑hedge/pledge and 5x salary ownership requirements bolster alignment .
- Supply/vesting overhang: Notable upcoming events include (1) DSU program liquidation on November 30, 2025 (Kardis DSUs: 187,731), potentially creating share delivery/sell pressure; and (2) RSU vesting in 2025/2026 and PSU cliff vesting in 2025/2026, subject to performance .
- Retention/CIC risk: Double‑trigger CIC severance at 2.0x base+bonus with equity continuation of PSUs (performance‑conditioned) incentivizes stability while limiting windfalls (no single‑trigger, no tax gross‑ups) .
- Governance: CEO is also a director but not Chair; independent Chair and fully independent committees mitigate dual‑role concerns; Board meeting cadence and attendance meet norms; strong Say‑on‑Pay support reduces immediate governance activism risk .