Richard J. Byrne
About Richard J. Byrne
Richard J. Byrne is Chairman of the Board and Chief Executive Officer of Franklin BSP Realty Trust (FBRT), serving as director since 2016 and CEO since September 2016 . He holds an MBA from Northwestern’s Kellogg School and a BA from Binghamton University . Age: 64 (2025) . Performance context: FBRT’s pay-versus-performance disclosures show TSR roughly flat in 2023 and slightly positive in 2024, with GAAP net income and Distributable Earnings improving from 2022 levels; the company’s key incentive considerations include Distributable Earnings, stockholder economic returns (book value change plus dividends), and absolute/relative TSR .
| Year | CEO SCT Total ($) | CEO CAP ($) | TSR ($100→) | Peer TSR ($100→) | GAAP Net Income ($000s) | Distributable Earnings ($000s) |
|---|---|---|---|---|---|---|
| 2022 | 1,164,379 | 1,128,652 | 85.93 | 69.74 | 14,215 | 116,076 |
| 2023 | 1,039,506 | 1,236,031 | 100.10 | 80.34 | 144,509 | 189,510 |
| 2024 | 1,577,585 | 1,649,891 | 103.62 | 80.51 | 92,403 | 100,682 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Benefit Street Partners (Advisor to FBRT) | President | 2013–present | Leads advisory platform; serves as CEO/Chairman across affiliated vehicles, aligning real estate finance strategy |
| Franklin BSP Lending Corp. (affiliated BDC) | CEO & Chairman | Since 2016 (2023 proxy) | Scales non-traded BDC lending platform; sector expertise in CRE credit |
| Franklin BSP Capital Corp. (affiliated BDC) | CEO & Chairman | Since 2020 | Expands capital solutions; complements FBRT origination ecosystem |
| Deutsche Bank Securities, Inc. | CEO | 2008–2013 | Led global capital markets unit; governance and risk leadership |
| Deutsche Bank | Global Co-Head of Capital Markets | 2006–2013 | Origination/distribution leadership in credit/capital markets |
| Merrill Lynch & Co. | Global Co-Head, Leveraged Finance; Global Head, Credit Research | 1985–1999 | Built leveraged finance franchise; top-ranked credit analyst |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Wynn Resorts, Limited (NASDAQ: WYNN) | Director | current | Public company board service; governance oversight |
| MFA Financial, Inc. | Prior Director | prior | Mortgage REIT sector experience |
Fixed Compensation
FBRT does not pay cash compensation to NEOs; Byrne’s reported compensation consists solely of annual equity grants (RSUs) under the 2021 Equity Incentive Plan. No salary, cash bonus, perquisites, or other benefits are provided by FBRT to NEOs .
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Total ($) |
|---|---|---|---|---|
| 2022 | — | — | 1,164,379 | 1,164,379 |
| 2023 | — | — | 1,039,506 | 1,039,506 |
| 2024 | — | — | 1,577,585 | 1,577,585 |
Notes:
- Role of Compensation Consultant: F.W. Cook advised on long-term equity award framework; Compensation Committee determined terms and peer practices; no conflicts identified .
- Equity awards are typically time-based RSUs vesting over three years .
Performance Compensation
Equity incentives are time-vested RSUs; the Compensation Committee considers multiple performance measures when determining grant sizes (no fixed formula), including Distributable Earnings, stockholder economic returns (book value change plus dividends), and absolute/relative TSR .
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Distributable Earnings | Not fixed; considered qualitatively | N/A | See pay-versus-performance table above | Grant determination input | RSUs vest in equal annual installments over 3 years |
| Stockholder economic returns (book value change + dividends) | Considered | N/A | Company disclosures in 10-K (referenced) | Grant determination input | 3-year time vest |
| Absolute TSR | Considered | N/A | 2022–2024 values disclosed | Grant determination input | 3-year time vest |
| Relative TSR (vs. REIT Mortgage Index) | Considered | N/A | Peer TSR in table | Grant determination input | 3-year time vest |
Grants of Plan-Based Awards (Byrne):
| Grant Date | RSUs (#) | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|
| 2/1/2024 | 119,063 | 1,577,585 | Equal annual installments over 3 years |
| 1/27/2023 | 72,999 | Included in 2023 SCT | Equal annual installments over 3 years |
| 1/27/2022 | 27,067 (unvested as of 12/31/2024) | Included in 2022 SCT | Equal annual installments over 3 years |
Vesting/Realization:
| Event | Shares Vested (#) | Value Realized ($) | Pricing Basis |
|---|---|---|---|
| 2024 vesting (reported) | 51,398 | 691,303 | $13.45 per share on 1/27/2024 |
Clawback Policy: FBRT must recover incentive-based compensation after an accounting restatement per NYSE 303A.14 and SEC Rule 10D-1; applies regardless of fault .
Equity Ownership & Alignment
Beneficial ownership has increased materially, and FBRT has strict hedging/pledging restrictions and executive stock ownership guidelines to align management with shareholders.
Beneficial Ownership (Byrne):
| As of | Shares Owned | % of Class | Notes |
|---|---|---|---|
| 4/1/2023 | 158,172 | <1% | RSUs excluded from % by policy |
| 4/1/2024 | 188,301 | <1% | RSUs excluded from % by policy |
| 4/1/2025 | 451,091 | <1% | Shares outstanding: 83,637,434 |
Unvested RSUs at 12/31/2024 (Byrne):
| Grant Date | Unvested Units (#) | Market Value ($) |
|---|---|---|
| 2/1/2024 | 119,063 | 1,493,050 (at $12.54) |
| 1/27/2023 | 48,666 | 610,272 |
| 1/27/2022 | 27,067 | 339,420 |
| Total | 194,796 | 2,442,742 |
Policies and Guidelines:
- Hedging and Pledging: Directors/officers are prohibited from hedging transactions and from holding FBRT securities in margin accounts; pledging requires Audit Committee pre-approval .
- Insider Trading Policy: Applies to directors/officers/Advisor personnel; attached to 10-K as exhibit; monitored by internal/external counsel .
- Executive Ownership Guidelines: CEO must own ≥3x the average shares granted over the prior 3 years; other executives ≥2x; compliance/on track as of 12/31/2022 . Executive officer stock ownership guidelines reaffirmed and referenced in 2024/2025 proxies .
Employment Terms
- Role/Start: Chairman & CEO since September 2016; director since 2016 .
- Employer of Record: Byrne is an employee of FBRT’s external Advisor (Benefit Street Partners, an affiliate of Franklin Templeton); FBRT pays only equity awards to NEOs .
- Severance/Change in Control: FBRT generally does not owe cash severance; RSU agreements provide vesting upon qualifying termination due to death/disability or in certain change-of-control scenarios. As of 12/31/2024, Byrne would receive RSU vesting value of $2,442,742 under death/disability or change of control; no payment upon ordinary termination .
- Clawback: Mandatory recovery of incentive compensation after restatements per NYSE/SEC rules .
- Perquisites: None provided by FBRT to NEOs .
- Advisor Fees (Related Party): FBRT incurred advisory/related party fees of $33.8 million (asset management and subordinated performance fees) plus reimbursements/expenses in 2023; $26.0 million in such fees in 2024, plus reimbursements/expenses .
Board Governance
- Roles: Byrne is both Chairman and CEO; Committees: none (as CEO/Chairman) .
- Dual-role implications: The Board believes the CEO is best positioned to act as chair given operational responsibility; structure may be modified as appropriate .
- Independence: Lead Independent Director (Elizabeth K. Tuppeny) provides balance and oversight; chairs executive sessions of independent directors; reviews agendas; liaison functions; authority to call meetings .
- Executive Officers: Byrne (CEO), Michael Comparato (President), Jerome S. Baglien (CFO/COO) .
Compensation Structure Analysis
- Mix: 100% equity RSUs from FBRT; no company-paid salary/bonus/perqs . This concentrates realized pay on stock price/dividend equivalents and vesting schedules.
- Metric Use: No fixed formula; grants consider Distributable Earnings, economic returns, originations, credit quality, and TSR (absolute/relative) .
- Governance Controls: Independent consultant F.W. Cook engaged; clawback policy complies with NYSE/SEC rules; strict hedging/pledging policy; executive ownership requirements .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Ownership trend | Byrne’s beneficial ownership rose from 158,172 (2023) to 188,301 (2024) to 451,091 (2025); each <1% of outstanding shares . |
| Unvested RSU overhang | 194,796 units with $2.44M market value at year-end 2024 (at $12.54 share price) . |
| Pledging/Hedging | Prohibited; pledging only with Audit Committee pre-approval . |
| Ownership guidelines | CEO: ≥3x average shares granted over prior 3 years; compliant/on track as of 12/31/2022 . |
Related Party Transactions
FBRT’s external advisory model (Benefit Street Partners) results in advisory and performance fees plus reimbursements. 2023: $33.8M asset management and subordinated performance fees; $14.4M reimbursements; $1.2M acquisition expenses; $1.2M other related party expenses . 2024: $26.0M asset management and subordinated performance fees; $9.7M reimbursements; $1.0M acquisition expenses; $1.3M other related party expenses .
Performance & Track Record
- Notable strategic evolution: Stable executive team since Advisor took over in 2016; no turnover among executive officers .
- Performance measures emphasized for grants: TSR, Distributable Earnings, economic returns (book value + dividends), origination and credit quality .
- Trading/listing context: TSR cumulative tracking since FBRT common began NYSE trading on 10/19/2021 (used in 2022 pay-versus-performance calculation) .
Employment Terms (Additional)
- Executive Officer roster and bios for team included in proxy; Byrne is also President of the Advisor .
- Indemnification agreements exist with directors/officers; no amounts paid under such agreements .
Board Service History and Dual-Role Implications
- Board service: Director since 2016; currently Chairman .
- Committee roles: None (CEO/Chairman); Lead Independent Director instituted to enhance independence and oversight .
- Dual role considerations: Board rationale for CEO as chair due to alignment with operational focus; mitigated by lead independent director authority and executive sessions of independent directors .
- Independence: Byrne is not independent as CEO; lead independent director responsibilities help counterbalance .
Director Compensation (Context)
- For directors, unvested restricted shares are disclosed and scheduled to vest (e.g., 8,841 shares for certain directors in 2025; 6,208 in 2024) . Specific cash retainer/chair fees are not detailed in cited sections.
Say-on-Pay & Shareholder Feedback
- 2022: No say-on-pay due to no NEO compensation in 2021; 2023: Say-on-pay added; Compensation Committee chair vote dynamics noted in 2023 proxy discussion .
Employment Contracts, Severance, and Change-of-Control Economics
| Provision | Byrne |
|---|---|
| Employment agreement with FBRT | Not applicable; employee of Advisor |
| Severance multiple (salary+bonus) | None by FBRT; RSU vesting only as described |
| Change-of-control trigger | RSU vesting in certain CoC circumstances (no cash); 12/31/2024 value $2,442,742 |
| Clawback | Mandatory per NYSE/SEC |
| Tax gross-ups | Not disclosed; perqs not provided |
| Non-compete/solicit | Not disclosed |
Risk Indicators & Red Flags
- External management/advisory fee structure constitutes ongoing related party payments; alignment mitigated via equity grants and ownership guidelines .
- Hedging/pledging restrictions reduce misalignment risk; pledging requires Audit Committee pre-approval .
- Dual Chairman/CEO structure offset by lead independent director responsibilities .
Compensation Peer Group (Benchmarking)
- Committee engaged F.W. Cook and reviewed peer practices; specific peer group composition/target percentile not disclosed in cited sections .
Expertise & Qualifications
- Education: MBA, Northwestern Kellogg; BA, Binghamton .
- Technical/industry expertise: Investment banking and real estate finance leadership across Deutsche Bank and Merrill Lynch; top-ranked credit analyst .
- Board qualifications: Current public board at Wynn Resorts; prior MFA Financial; multiple affiliated BDC boards .
Work History & Career Trajectory
| Organization | Role | Tenure | Highlights |
|---|---|---|---|
| FBRT | Chairman & CEO | 2016–present | Led company through advisor-led model; equity alignment framework |
| Benefit Street Partners | President | 2013–present | Oversees real estate Advisor; platform originations/credit oversight |
| Deutsche Bank Securities | CEO | 2008–2013 | Ran US broker-dealer; executive committee memberships |
| Deutsche Bank | Global Co-Head, Capital Markets | 2006–2013 | Capital markets leadership |
| Merrill Lynch & Co. | Global Co-Head, Leveraged Finance; Global Head, Credit Research | 1985–1999 | Built leveraged finance; top-ranked analyst |
Compensation Committee Analysis
- Committee composition and independence not detailed here; use of independent consultant (F.W. Cook) and annual risk review of Advisor compensation practices; no turnover among executive officers since Advisor assumed role in 2016 .
Investment Implications
- Alignment: Byrne’s compensation is entirely equity RSUs with three-year time vesting, combined with strict no-hedging/limited pledging and ownership guidelines—supportive of long-term alignment. However, the external Advisor fee model creates ongoing related party economics that can dilute net performance; monitoring fee levels vs. Distributable Earnings and TSR is prudent .
- Retention/overhang: Unvested RSUs of ~195k units and ~$2.44M value at YE 2024 imply scheduled annual vesting events that can create incremental selling pressure upon vesting (absent 10b5-1 plans), though director/officer policies restrict hedging and pledging . The company reports stable executive tenure since 2016, reducing near-term transition risk .
- Governance: Dual Chairman/CEO structure is mitigated by a strong lead independent director role and independent sessions, but remains a focal point for governance-sensitive investors . No company-funded severance; RSU vesting upon death/disability/CoC limits cash drain but increases equity dilution risk in stress scenarios .
- Performance signals: Grant sizing incorporates Distributable Earnings, TSR (absolute/relative), and economic returns rather than fixed metrics—investors should track these drivers quarter-to-quarter to anticipate grant trends and compensation momentum .