Richard Mack
About Richard Mack
Richard J. Mack (age 57) is Chief Executive Officer and Chairman of Claros Mortgage Trust, Inc. (CMTG). He co‑founded Mack Real Estate Group (2013) and Mack Real Estate Credit Strategies (2014) and previously led AREA Property Partners’ North America business; he holds a B.S. in Economics from Wharton and a J.D. from Columbia Law School . CMTG’s pay‑versus‑performance disclosure shows cumulative TSR fell to $35.72 on a $100 base by FY2024, alongside Net Loss of $221.27 million and Distributable Loss of $95.65 million, framing a challenging performance environment during his tenure as CEO/Chair since the company’s founding .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mack Real Estate Group (MREG) | Co‑Founder, CEO; Investment Committee member | 2013–present | Built platform; expanded investment capabilities |
| Mack Real Estate Credit Strategies (MRECS) | Co‑Founder; Investment Committee member | 2014–present | Originated and managed credit strategies |
| AREA Property Partners (founded as Apollo Real Estate Advisors) | CEO, North America; Global Investment Committee member | — | Created new business lines (development, subordinate debt, special servicing/CMBS trading) and invested “billions” across real estate debt/equity |
| Shearson Lehman Hutton | Real Estate Investment Banking | — | Early‑career investment banking experience |
External Roles
| Organization | Role | Years | Strategic/Community Contribution |
|---|---|---|---|
| Wharton School | Board of Advisors; previously Undergraduate Advisory Board; co‑taught Real Estate Disruption course | — | Academic engagement and curriculum development |
| Northwell Health | Board of Trustees | — | Healthcare system governance |
| Child Mind Institute | Board of Directors | — | Child mental health advocacy and oversight |
| Met Council | Chair, Board of Directors | — | Anti‑poverty services for New Yorkers |
| Robin Hood Foundation | Housing & Homelessness Committee (member) | — | Philanthropic focus on housing |
| HES Community Center | President Emeritus | — | Community service leadership |
Board Governance and Service at CMTG
- Role and independence: Mack serves as CEO and Chairman; the Board designates W. Edward Walter III as Lead Independent Director to balance the combined role and oversee executive sessions and agendas; Mack is not considered independent under NYSE standards given his executive role .
- Committees: All three standing committees (Audit; Compensation; Nominating & Corporate Governance) are fully independent; Mack does not serve on these committees .
- Board activity: The Board held nine meetings in 2024; all directors attended at least 75% of meetings/committees on which they served .
- Dual‑role implications: The Board believes the combined CEO/Chair role provides decisive leadership and strategic focus; governance is supported by a majority‑independent Board and a Lead Independent Director structure .
Fixed Compensation (CEO)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (paid by CMTG) | $0 | $0 | $0 |
| Cash Bonus (paid by CMTG) | $0 | $0 | $0 |
| Notes | Company is externally managed; CEO receives cash comp from Manager, not CMTG . In 2024, Manager paid NEOs ~$3.1m aggregate (8.7% of CMTG’s management + incentive fees) but individual CEO base/bonus amounts are not disclosed by CMTG . |
Performance Compensation
- Equity philosophy: CMTG grants time‑based RSUs to align executives with shareholders and promote retention; awards generally vest over three years; dividend equivalents accrue on unvested RSUs .
- Performance metrics for Manager‑paid variable comp: The Manager did not use fixed metric weightings for 2024; it exercised discretion considering Distributable Earnings (Loss), Net Income (Loss), and TSR by role, reducing transparency of pay‑for‑performance alignment .
- Clawback and hedging/pledging: CMTG adopted a clawback compliant with SEC/NYSE rules (recoverable from time/performance‑vesting equity) and prohibits hedging and pledging of CMTG stock by officers and directors acting for/on behalf of the Company .
CEO RSU Grants and Vesting
| Grant Date | Type | Shares Granted | Vesting Schedule | Change in Control / Termination Provisions |
|---|---|---|---|---|
| Jun 14, 2022 | Time‑based RSUs | — | 1/3 on Jul 1, 2023; 1/3 on Jul 1, 2024; balance on Jul 1, 2025, subject to service; full vest on death/disability | If not assumed/substituted in a change in control, outstanding awards vest immediately; death/disability accelerate unvested RSUs |
| Mar 30, 2023 | Time‑based RSUs | — | 1/3 on Apr 1, 2024; 1/3 on Apr 1, 2025; 1/3 on Apr 1, 2026; death/disability accel | See at left |
| Mar 25, 2024 | Time‑based RSUs | 265,240 | Apr 1, 2025; Apr 1, 2026; Apr 1, 2027 (substantially equal tranches); death/disability accel | See at left |
2024 Incentive Outcomes (Equity)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Stock Awards (grant‑date fair value, CEO) | $14,310,747 | $3,354,032 | $2,556,914 |
| RSUs Granted (CEO) | — | — | 265,240 |
| RSUs Vested (CEO) | — | — | 353,760 |
- Performance metric framework (Manager‑paid variable comp) | Weighting | Target | Actual | Payout | Vesting
- Distributable Earnings (Loss); Net Income (Loss); TSR | Discretionary (no fixed weights) | Not disclosed | Manager‑assessed | Not disclosed | N/A (time‑based RSUs vest over 3 years)
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (CEO) | 1,980,981 shares; 1.4% of outstanding as of Apr 7, 2025 |
| Unvested RSUs outstanding (12/31/2024) | 717,939 RSUs; market value $3,245,084 at $4.52/share |
| 2024 vesting/settlement (CEO) | 353,760 RSUs vested; $2,957,384 value; 157,174 shares delivered after tax withholding (balance withheld for taxes) |
| Hedging/pledging | Prohibited for officers and directors acting for/on behalf of the Company |
| Executive ownership guidelines | Not disclosed for executives; non‑employee directors must hold ≥3x annual cash retainer within 5 years |
Employment Terms
| Topic | Key Terms |
|---|---|
| Employment status | Externally managed; CEO is an employee/principal of affiliates of the Manager; no cash comp paid by CMTG to CEO |
| Severance | CMTG reports no severance arrangements to make cash payments to executives upon termination/change in control |
| Equity acceleration | Unvested RSUs vest on death/disability; if awards are not assumed/substituted upon a change in control, they vest immediately |
| Management Agreement (MA) economics | Base fee 1.5% of stockholders’ equity (quarterly); incentive fee: 20% of Core Earnings above a 7% annual hurdle on a rolling 4‑quarter basis (not less than zero) |
| MA term and termination | Term extends until earlier of Aug 25, 2025 or complete disposition; if CMTG defaults and Manager terminates, termination fee equals 3× the average annual base + incentive fees over prior 24 months; company may terminate for specified cause events without a fee |
| 2024 Manager fees and reimbursements | $36.2m management & incentive fees; $4.3m reimbursed expenses; $27.0m management fee payable and $3.1m reimbursable expenses outstanding at 12/31/24 |
| Clawback | Dodd‑Frank/NYSE compliant clawback for erroneously paid incentive compensation (applies to Section 16 officers; equity included) |
| Non‑compete/solicit | Not disclosed |
Performance & Track Record
| Measure | 2022 | 2023 | 2024 |
|---|---|---|---|
| Cumulative TSR ($100 base at 11/3/2021) | $97.63 | $100.41 | $35.72 |
| Net Income (Loss) ($mm) | $112.06 | $6.03 | $(221.27) |
| Distributable Earnings (Loss) ($mm) | $194.35 | $39.94 | $(95.65) |
| Say‑on‑Pay approval | — | — | 83% approval at 2024 Annual Meeting |
Notable operational/governance items:
- Registration statement filed Feb 20, 2025 registering the resale of 16,058,983 shares held by certain pre‑IPO holders (potential secondary supply overhang) .
- Equity plan capacity: 2,824,358 shares subject to outstanding awards; 3,693,904 shares remaining available for issuance as of 12/31/2024 (dilution backdrop) .
Related Party Transactions and Governance Considerations
- Management Agreement is between CMTG and an affiliate of MRECS; Board discloses related‑party nature and potential lack of arm’s‑length terms; Audit Committee oversees related‑party transactions under written policy .
- Board independence: 6 of 9 nominees are independent; Mack is not independent (CEO/Chair); Lead Independent Director framework in place; committees fully independent .
Compensation Committee Analysis
- Committee composition: Chair Vincent Tese; members Derrick D. Cephas and Pamela Liebman; all independent .
- Consultant: Farient Advisors engaged to review 2025 equity pool; Compensation Committee deemed independent (no conflicts) .
- Scope: Oversees executive and director compensation, equity plan, clawback administration, and annual review of the Management Agreement economics and Manager performance .
Investment Implications
- Alignment and overhang: Mack’s substantial unvested RSUs (717,939) vesting on Apr 1, 2025/2026/2027 and Jul 1, 2025 create predictable settlement dates; 2024 vesting resulted in share withholding for taxes (net 157,174 shares delivered), and a Feb 2025 S‑3 registering 16.1m shares adds potential secondary supply—both relevant to near‑term trading dynamics around vesting/lockstep liquidity events .
- Pay‑for‑performance risk: Manager‑determined variable comp without fixed weights (DE, Net Income, TSR considered) reduces transparency; however, “compensation actually paid” to PEO turned negative in 2024 due to equity value declines, indicating realized alignment with TSR outcomes .
- External management economics: The 1.5% base fee plus incentive fee over a 7% hurdle and a 3× termination fee if the Manager terminates for CMTG default embed structural costs and switching frictions, which may weigh on long‑term returns if performance does not improve .
- Governance mitigants: Majority‑independent board, independent committees, lead independent director, clawback, and prohibitions on hedging/pledging address several governance red flags associated with dual CEO/Chair roles and external management models .
Overall: Near‑term equity settlement calendars and newly registered secondary supply can pressure shares around vest dates; structurally, external‑manager incentives and related‑party economics merit ongoing monitoring, while 2024’s negative TSR and losses heighten execution risk and the importance of demonstrated improvements in Distributable Earnings and credit performance .