Harold Schwartz
About Harold Schwartz
Harold E. Schwartz (age 60) serves as Senior Vice President, General Counsel and Secretary at MFA Financial, Inc.; he joined MFA in 2011 after roles at American Express and Schulte Roth & Zabel. He holds a J.D. from Georgetown University and an A.B. from Duke University . Company performance during 2024 included GAAP net income of $119.251 million, quarterly dividends totaling $1.40 per share, and cumulative TSR translating a $100 investment to $56.74; Adjusted Distributable Earnings ROAE was 11.76% for 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American Express Company | Vice President and Senior Counsel | 2001–2011 | Specialized in corporate, securities, corporate governance and M&A matters, supporting complex transactions and disclosures |
| Schulte Roth & Zabel LLP | Attorney | Not disclosed | Early-career training in corporate and securities law; foundational legal skills for public company governance |
External Roles
None disclosed in the proxy statement for Harold E. Schwartz .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 455,000 | 475,000 | 475,000 |
| 401(k) Employer Match ($) | 12,200 | 13,200 | 13,800 |
| Perquisites (beyond broad employee programs) | None | None | None |
Performance Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Discretionary Bonus (Cash) ($) | 425,000 | 600,000 | 925,000 |
| Formulaic Non-Equity Incentive ($) | — (not applicable) | — (not applicable) | — (not applicable) |
| Stock Awards Grant-Date Fair Value ($) | 375,013 | 675,014 | 675,010 |
| Total Compensation ($) | 1,267,213 | 1,763,214 | 2,088,810 |
2024 Incentive Methodology (Discretionary Framework Used)
| Metric (Company-Level) | Framework Weighting | Target | Actual | Notes |
|---|---|---|---|---|
| Adjusted GAAP ROAE | Framework reference (no fixed weight for Schwartz) | 9.25% | 13.73% | Company exceeded target; used qualitatively in bonus deliberations |
| Adjusted Distributable Earnings ROAE | Framework reference (no fixed weight for Schwartz) | 9.25% | 12.53% | Company exceeded target; used qualitatively |
| Relative DE ROAE Percentile (vs REM constituents) | Framework reference (no fixed weight for Schwartz) | 50th percentile | 81.8th percentile | Top-quintile ranking; used qualitatively |
The Compensation Committee applied a similar framework to Schwartz as for the CEO/CIO (illustrative 50% formulaic, 50% individual/company), then exercised judgment to set the discretionary bonus; Schwartz’s actual 2024 bonus was $925,000 .
Equity Incentives and Vesting Schedules
| 2024 Grants (as of Jan 2, 2024) | Units (#) | Grant-Date FV ($) | Vest/Performance | Settlement |
|---|---|---|---|---|
| TRSUs | 24,000 | 270,000 | Cliff vest 12/31/2026; dividend equivalents paid in cash as declared | |
| PRSUs (Target) | 38,935 | 405,010 | Cliff vest 12/31/2026; 0–200% of target based on absolute and relative TSR; dividend equivalents accrue and are paid in shares upon vesting | |
| PRSUs Settlement Timing | — | — | — | Vested PRSUs settle Jan 2028 (one-year deferral) |
| Outstanding Awards (12/31/2024) | Type | Units (#) | Market/Payout Value ($) | Vest Date / Performance |
|---|---|---|---|---|
| 2023 TRSUs | Time-based RSUs | 26,575 | 270,799 | Cliff vest 12/31/2025; cash dividend equivalents after vest |
| 2024 TRSUs | Time-based RSUs | 24,000 | 244,560 | Cliff vest 12/31/2026; cash dividend equivalents as declared |
| 2023 PRSUs (Target) | Performance RSUs | 50,944 | 519,119 | Cliff vest 12/31/2025; TSR absolute/relative; DEs accrue, paid in shares |
| 2024 PRSUs (Target) | Performance RSUs | 38,935 | 396,748 | Cliff vest 12/31/2026; TSR absolute/relative; DEs accrue, paid in shares |
| Vested in 2024 | Units (#) | Value Realized ($) | Notes |
|---|---|---|---|
| Stock Awards (TRSUs + PRSUs from 2022 grants) | 14,835 | 151,168 | PRSU dividend equivalents to be issued upon PRSU settlement (2,925 shares, ~$29,806 at vesting) |
Equity Ownership & Alignment
| Ownership Item | Value |
|---|---|
| Common Stock Beneficially Owned (#) | 53,579 (less than 1% of shares outstanding) |
| Fully-Vested RSUs (#) | 9,590 |
| Stock Ownership Guidelines (Executives) | Company retains stock retention and ownership policy; explicit 4x salary retention applies to CEO/CIO; no specific guideline for Schwartz disclosed |
| Hedging/Pledging | Insider Trading Policy prohibits hedging, short sales, margin accounts, and pledging of MFA securities |
| Clawback Policy | Company clawback for performance-based compensation upon accounting restatement; 3-year lookback; also award forfeiture/recoupment for covenant breaches (confidentiality, non-solicit) |
Employment Terms
| Term | Details |
|---|---|
| Status | At-will; amended and restated termination agreement dated Feb 21, 2024 (filed Feb 22, 2024) |
| Annual Bonus Structure | Discretionary, guided by company and individual performance; no preset target; 2024 actual cash bonus $925,000 |
| Severance (No CIC) | Greater of (i) 100% base salary + Median Bonus or (ii) 200% base salary; table shows cash severance $1,075,000 (consistent with $475k base + ~$600k median bonus) |
| Health Benefits (No CIC) | Continued participation in MFA health plan for 12 months post-termination (certain scenarios) |
| Equity Treatment (No CIC) | Immediate full vesting/settlement of TRSUs; pro rata PRSU vesting subject to performance; includes accrued DEs paid in shares |
| Change-in-Control (Double Trigger) | Benefits only if terminated by MFA (other than for Cause) or resigns for Good Reason within 12 months post-CIC; immediate full vesting of all equity (assuming target PRSUs); severance equal to greater of base+median bonus or 200% base salary; 12 months health coverage |
| Restrictive Covenants | Confidentiality and non-solicit of employees for a period post-termination (award agreements also permit forfeiture/recoupment for breaches) |
| Tax Gross-Ups | None; agreements structured to avoid excise tax gross-ups |
| Deferred Compensation | Senior Officers Deferred Bonus Plan exists; currently no executive deferrals outstanding |
Potential Payments (Illustrative Amounts as of 12/31/2024)
| Scenario | Cash Severance ($) | Accelerated Equity Value ($) | Health Benefits ($) | Total ($) |
|---|---|---|---|---|
| Death | — | 1,431,226 | — | 1,431,226 |
| Disability | — | 1,431,226 | — | 1,431,226 |
| Termination without Cause / Resignation for Good Reason | 1,075,000 | 993,688 | 54,648 | 2,123,336 |
| Change-in-Control (Double Trigger) | — (severance same amount as no-CIC scenario) | 1,431,226 | — | 1,431,226 plus severance per formula |
Performance & Track Record
- Legal leadership across financing and strategic transactions in 2024, including support for two public offerings of senior notes and ongoing securitizations; highlighted for governance and disclosure leadership and department management .
- MFA completed eight securitizations totaling $2.4 billion UPB in 2024, prioritized non-mark-to-market financing (~73% of total liabilities), and closed year with ~$339 million unrestricted cash and overall leverage of 5.0x .
- Pay-versus-performance: Say-on-Pay approval of 92.6% in June 2024; 2024 CAP/TSR/ROAE disclosure indicates compensation alignment with ROAE and TSR outcomes .
Compensation Structure Analysis
- Shift and mix: Schwartz’s compensation emphasizes variable cash and RSUs; no options granted by MFA in recent years, consistent with company practice (reduces repricing risk) .
- Discretion-driven bonuses: For senior staff not responsible for portfolio investment decisions (CFO, CLOO, GC), the committee used company formulaic metrics as a framework but retained full discretion, aligning awards with overall company results and individual impact .
- Long-term alignment: 60% of 2024 long-term awards are performance-based PRSUs linked to absolute and relative TSR, with one-year settlement deferral post-vesting to temper near-term selling pressure .
Equity Ownership & Alignment Details
| Item | Disclosure |
|---|---|
| Beneficial ownership | 53,579 common shares; 9,590 fully-vested RSUs; <1% of class |
| Vested vs unvested | 2024 vesting: 14,835 units valued at $151,168; unvested TRSUs/PRSUs detailed above |
| Pledging/Hedging | Prohibited by policy; no pledging disclosures noted |
| Ownership guidelines compliance | Executives subject to retention/ownership policies in certain cases; explicit 4x salary restriction applies to CEO/CIO; no specific threshold disclosed for Schwartz |
Employment Contracts, Severance, and Change-of-Control Economics
- At-will with tailored termination/severance agreement; no single-trigger vesting on CIC; double-trigger required .
- Severance economics: Greater of base+median bonus or 2x base; 12 months COBRA-equivalent health; full TRSU vest and pro rata PRSU vest in non-CIC termination; full equity vest (assumed at target for PRSUs) on double-trigger CIC .
- Clawbacks and forfeiture: Company-wide clawback for restatements and award-level forfeiture/recoupment for covenant breaches .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval (%) |
|---|---|
| 2024 | 92.6% |
Investment Implications
- Alignment: Schwartz’s pay structure is primarily variable cash plus TSR-linked RSUs; anti-hedging/pledging and clawbacks support shareholder alignment .
- Vesting/supply: Key vest dates (12/31/2025 and 12/31/2026) and PRSU settlement deferral to January 2028 may stagger supply and reduce near-term insider selling pressure .
- Retention risk: At-will status offset by meaningful severance and equity acceleration provisions; governance and transaction leadership highlight execution capability during rate volatility .
- Pay-for-performance: Discretionary bonus aligned to company ROAE/TSR outcomes via framework; continued emphasis on TSR-based PRSUs ties realized value to investor returns .
Note: All metrics, amounts, and dates are taken directly from MFA’s 2025 DEF 14A proxy statement. Citations reference document and chunk IDs from the proxy.