Brian Harris
About Brian Harris
Brian Harris, 64, is Ladder Capital’s co‑founder, Chief Executive Officer (since October 2008) and a director (since May 2013). He invested $25 million at inception and owns 6.5% of Class A common stock, making him Ladder’s top individual and third‑largest overall stockholder, with strong alignment to shareholder outcomes . He holds a B.S. in Biology and an M.B.A. from SUNY Albany . Company performance metrics used to drive his pay include distributable EPS ($1.21 in 2024), distributable earnings ($153.9 million in 2024), and after‑tax distributable ROAE (9.9% in 2024). Ladder’s 1‑ and 3‑year TSR exceeded Business Comparables, book value per share increased ~2% over two years vs. −16% for peers, and dividends were covered at 132% in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Dillon Read Capital Management (UBS AG) | Senior Partner, Managing Director, Head of Global Commercial Real Estate | Jun 2006–May 2007 | Managed over $500 million of equity capital for global CRE activities . |
| Credit Suisse | Head of Commercial Mortgage Trading | Not disclosed | Led proprietary CRE investment and trading activities . |
| Lehman Brothers; Salomon Brothers; Smith Barney; Daiwa Securities | Real Estate Groups | Not disclosed | Senior roles across leading banks in CRE markets . |
External Roles
- No additional public company directorships or external board roles for Mr. Harris are disclosed in the proxy beyond service at Ladder Capital entities .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,000,000 | 1,000,000 | 1,000,000 |
| All Other Compensation ($) | 2,910 | 2,910 | 2,910 |
| Imputed Benefits: Life ($) | 2,340 | 2,340 | 2,340 |
| Imputed Benefits: Disability ($) | 570 | 570 | 570 |
Notes:
- Aggregate base salaries for NEOs are targeted around the 25th percentile of peers, consistent with pay‑for‑performance emphasis .
Performance Compensation
Summary of Annual Incentives (Structure and Outcomes)
| Component | Structure | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Cash Bonus ($) | 4.05% minimum of distributable earnings for CEO (9% aggregate pool for NEOs) | 6,785,000 | 8,201,000 | 7,928,305 |
| Equity Award ($) | ≥0.41% of Senior Mgmt equity pool; NEO equity pool = 1.0–1.5% of greater of shareholders’ equity or market cap; CEO fully vested at grant | 4,735,444 | 5,780,033 | 6,580,127 |
Equity Grant Details and Vesting
| Grant Date | Shares Granted | Grant Date Fair Value ($) | Vesting Terms |
|---|---|---|---|
| Feb 18, 2023 (for 2022 performance) | 408,933 | 4,735,444 | CEO awards fully vested at grant per agreement . |
| Feb 18, 2024 (for 2023 performance) | 540,190 | 5,780,033 | CEO awards fully vested at grant . |
| Feb 18, 2025 (for 2024 performance) | 563,367 | 6,580,127 | CEO awards fully vested at grant . |
Options Outstanding (Legacy)
| Grant Year | Options Exercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|
| 2014 Annual Award | 321,178 | 16.14 | Feb 18, 2025 |
| 2015 Annual Award | 133,736 | 11.72 | Feb 18, 2026 |
Performance Metrics and Payout Mechanics
| Metric | Weighting | Target | Actual (2024) | Payout Basis | Vesting |
|---|---|---|---|---|---|
| Distributable Earnings | Not disclosed | N/A | $153.9mm | Cash bonus proportional, CEO 4.05% minimum | N/A (cash) |
| Shareholders’ Equity / Market Cap | Not disclosed | N/A | Used for equity pool sizing | Equity award proportional to 1.0–1.5% of greater of equity or market cap; CEO ≥0.41% of pool | CEO fully vested at grant |
| Pre‑Tax Distributable ROAE (for other NEOs) | Not disclosed | ≥8% per year | 10.1% | Drives performance‑vesting; annual/catch‑up mechanics | 3‑year annual vesting with catch‑up |
Additional notes:
- No minimum payout guarantees for cash or equity; 2020–2021 bonuses were waived in favor of equity, increasing alignment .
- Clawback policy in place per NYSE rules for incentive payments .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 8,323,789 shares; 6.5% of Class A outstanding . |
| Ownership Breakdown | 927,412 direct shares; 133,736 options; 1,048,394 (Shallow Alcove LLC); 400,540 (Harris Investment Associates, L.P.); 1,020,084 (Harris Investment Associates II, L.P.); 4,793,623 (Betsy A. Harris 2012 Family Trust). Disclaims beneficial ownership of entity/Trust shares . |
| Vested vs. Unvested | CEO awards are fully vested at grant; as of 12/31/24, outstanding equity for Harris consisted of fully vested options (no unvested stock awards shown) . |
| Options Status | 454,914 exercisable; exercise prices $16.14 (2025 expiry) and $11.72 (2026 expiry) . |
| Pledging/Hedging | Prohibited for directors, officers, employees; no pledging red flag . |
| Ownership Guidelines | 5x salary requirement for CEO; Harris historically averaged 82x base salary ownership, far exceeding guidelines . |
| Insider Ownership | Management and Board collectively own 11.5% as of 12/31/24; Board alone 10.9% . |
Employment Terms
| Term | Detail |
|---|---|
| Agreement | Third Amended and Restated Employment Agreement (May 22, 2017) . |
| Term | Indefinite . |
| Base Salary | Not less than $1,000,000 per annum . |
| Annual Cash Bonus | Not less than 4.05% of distributable earnings (if any) . |
| Annual Equity Incentive | Not less than 41% of Senior Management Team’s annual equity incentive amount; awards fully vested at grant . |
| Severance (No CIC) | Greater of $10,000,000 or 2x (base salary + average of prior 2 cash bonuses), paid 50% lump sum, 50% in 12 monthly installments; prorated minimum bonus and equity; healthcare reimbursements up to 2 years . |
| Severance (CIC within 1 year) | Cash severance paid entirely in lump sum (as permitted by law) . |
| Covenants | Perpetual confidentiality (with exceptions); 1‑year non‑compete; 2‑year non‑solicit . |
| Potential Payments (Illustrative at 12/31/24) | Total cash severance $16,986,000; benefits $102,091; total $17,088,091 for termination without cause/good reason; same cash under CIC conditions . |
Board Governance
- Service history: Director of Ladder Capital Corp since May 2013; director of LCFH since October 2008 .
- Committee roles: Member, Risk and Underwriting Committee (approves material investments; meets at least quarterly) .
- Independence: Not independent under NYSE/SEC due to management role; 5 of 7 directors are independent; independent Non‑Executive Chair (Alan Fishman) presides over executive sessions .
- Attendance: Each director attended or participated in at least 75% of Board and committee meetings in 2024 .
- Dual‑role implications: CEO + Director with risk committee membership centralizes underwriting oversight in management; mitigated by independent Chair, fully independent Compensation/Audit/Nominating committees, and regular executive sessions .
Director Compensation (for Harris)
- As CEO, Mr. Harris does not receive additional compensation for Board service; director fees apply only to non‑employee directors .
Compensation Peer Group and Say‑on‑Pay
- Compensation peer group: Internally managed real estate finance and investment companies (e.g., Arbor Realty Trust, BrightSpire Capital, Redwood Trust, Safehold, Walker & Dunlop, MFA Financial, PennyMac, Kennedy‑Wilson), median market cap ~$1.3B .
- Business Comparables set includes CRE mortgage REITs (e.g., Blackstone Mortgage Trust, Starwood Property Trust, KKR Real Estate Finance Trust, Claros Mortgage Trust) .
- 2024 say‑on‑pay support: 38.9% (non‑binding); Board retained framework citing strong performance and contractual obligations, added stock ownership guidelines and clawback policy .
- Say‑on‑frequency vote: 80.4% favored annual; Board maintained triennial frequency citing long‑term perspective, contractual constraints, administrative efficiency, and insider alignment .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Distributable Earnings ($mm) | 148.4 | 167.7 | 153.9 |
| Distributable EPS ($) | 1.16 | 1.34 | 1.21 |
| After‑Tax Distributable ROAE (%) | 9.7% | 10.9% | 9.9% |
| Liquidity ($bn) | — | — | 2.2 |
| Annual Loan Payoffs ($bn) | — | — | 1.7 (61 positions) |
| Dividend Coverage (%) | — | — | 132% (1.21 earned vs 0.92 dividend) |
| Credit ratings movement | — | Outlooks/ratings improved across Moody’s, Fitch, S&P . |
Compensation History (CEO)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Base Salary ($) | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
| Cash Bonus ($) | — | — | 6,785,000 | 8,201,000 | 7,928,305 |
| Stock Awards ($) | 9,022,636 | 9,916,855 | 4,735,444 | 5,780,033 | 6,580,127 |
| Total Compensation ($) | 10,022,636 | 10,916,855 | 12,520,444 | 14,981,033 | 15,508,432 |
Related Party Transactions and Red Flags
- Registration rights agreements include Mr. Harris; standard liquidity provisions over time .
- Hedging/derivatives/pledging of company securities prohibited, reducing misalignment risks .
- No pension benefits; limited perquisites disclosed .
- Board noted low 2024 support for certain director votes (e.g., Durst at 44%) and say‑on‑pay, and engaged shareholders in response .
Investment Implications
- Alignment and retention: Harris’s substantial personal stake (6.5%) and fully vested equity grants enhance alignment and reduce vesting‑driven selling pressure; pledging ban removes collateral risk . Severance could be material (~$17.1 million) under a termination scenario, a consideration for change‑of‑control or governance campaigns .
- Pay‑for‑performance linkage: Cash and equity awards scale with distributable earnings, shareholders’ equity, and market cap; strong 2024 distributable performance and ROAE support incentive payouts .
- Governance checks: CEO serves on the Risk and Underwriting Committee, but an independent Chair, fully independent key committees, executive sessions, and high insider ownership help balance dual‑role concerns .
- Shareholder sentiment: 2024 say‑on‑pay and frequency votes indicate ongoing scrutiny; continued engagement and transparency on metrics/vesting mechanics will be critical ahead of future votes .
- Trading signals: Fully vested annual stock awards provide liquidity flexibility, but insider policies restrict hedging/pledging; monitor Form 4s and upcoming vest events for other NEOs where performance‑vesting applies .