Arthur Laffer
About Arthur Laffer
Dr. Arthur B. Laffer (age 84) has served as an independent director of NexPoint Real Estate Finance, Inc. (NREF) since February 2020. He is an economist best known as the “Father of Supply-Side Economics,” founder and chairman of Laffer Associates (since 1978), and former chairman/director of Laffer Investments (1999–2019). He currently also serves on multiple affiliate REIT boards within the NexPoint platform and brings deep economics and policy expertise to the boardroom . He is designated by the board as an “audit committee financial expert” .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Laffer Associates | Founder and Chairman | Since 1978 | Economic research and consulting leadership |
| Laffer Investments | Chairman and Director | 1999–2019 | Registered investment adviser leadership |
| U.S. Executive Office of the President (OMB) | First Chief Economist (under George Shultz) | Early 1970s | Federal budget/economic policy leadership |
| Reagan Administration | Member, Economic Policy Advisory Board | 1980s | National economic policy advisor |
| MPS Group, Inc. (sold to Adecco, 2009) | Director | Prior to 2009 | Board member during $1.3B sale to Adecco |
| GEE Group, Inc. | Director | 2014–2020 | Public staffing company directorship |
| Pepperdine University | Distinguished University Professor; Board member (prior) | Prior | Academic leadership |
| University of Southern California | Charles B. Thornton Professor of Business Economics | Prior | Academic leadership |
| University of Chicago | Associate Professor of Business Economics | Prior | Academic leadership |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| NexPoint Residential Trust, Inc. (NXRT) | Director | Since May 2015 | Affiliate of NREF’s manager |
| VineBrook Homes Trust, Inc. | Director | Since Dec 2018 | Affiliate of NREF’s manager |
| NexPoint Homes Trust, Inc. (NXHT) | Director | Since Jun 2022 | Affiliate of NREF’s manager |
| NexPoint Diversified Real Estate Trust (NXDT) | Trustee | Since Jul 2022 | Affiliate of NREF’s manager |
| VerifyMe, Inc. | Director | Since 2019 | Public company board |
| 1065 Institute Inc. | Secretary | Since 2017 | 501(c)(3) non-profit |
Board Governance
- Independence: The board determined Dr. Laffer is independent under NYSE rules .
- Committee assignments (2024 activity level in parentheses):
- Audit Committee, member; board-designated “audit committee financial expert”; committee met 5 times in 2024 .
- Compensation Committee, Chair; committee met 5 times in 2024 .
- Nominating & Corporate Governance Committee, member; committee met 5 times in 2024 .
- Attendance: Board met 5 times in 2024; all directors met at least 75% attendance except Mr. Dondero, implying Dr. Laffer met the attendance threshold .
- Board leadership: Chairman is President James Dondero; lead independent director is Scott Kavanaugh with defined responsibilities .
- Executive sessions and policies: Independent directors meet in executive session; code of conduct prohibits hedging/shorting by directors; committee charters and governance guidelines available on the company website .
Fixed Compensation
| Year | Cash Fees ($) | Notes |
|---|---|---|
| 2024 | 27,500 | Includes $20,000 base director retainer and $7,500 Compensation Chair fee |
- Standard non-management director pay: $20,000 cash retainer; Audit Chair $15,000; Compensation Chair $7,500; Nominating & Governance Chair $7,500; Lead Independent Director $10,000 .
Performance Compensation
| Grant Date | Instrument | Shares/Units | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| Mar 13, 2024 | RSUs | 4,530 | 66,410 | Vested Mar 13, 2025 (1-year cliff) |
- Director equity is time-based RSUs; no performance metrics disclosed for director equity awards .
Other Directorships & Interlocks
| Entity | Relationship to NREF | Interlock/Note |
|---|---|---|
| NXRT, NXDT, NXHT, VineBrook | Affiliates of NREF’s manager (NexPoint) | Dr. Laffer serves on all four affiliate boards, increasing ecosystem interlocks . The board has determined that simultaneous service on more than three public company audit committees (applicable to several directors, including Dr. Laffer) does not impair effectiveness . |
| VerifyMe, Inc. | Unrelated public company | Independent external board role |
| 1065 Institute Inc. | Non-profit | Secretary |
Expertise & Qualifications
- Board-designated “audit committee financial expert” with financial literacy under NYSE rules .
- Distinguished background in economics and public policy; former OMB Chief Economist; Presidential Economic Policy Advisory Board member; extensive academic credentials and publications history implied by professorships .
- Brings capital markets and governance experience from multiple public company boards .
Equity Ownership
| Metric | Amount |
|---|---|
| Common shares beneficially owned | 59,491 (less than 1% of class) |
| RSUs held at 12/31/2024 | 4,530 (vested Mar 13, 2025) |
| Shares pledged | No pledging disclosed for Dr. Laffer; pledging disclosed for certain other insiders (e.g., Dondero, Mitts) |
Governance Assessment
Key findings for board effectiveness, conflicts, and investor-confidence signals:
-
Strengths
- Independent director with strong attendance (≥75%) and substantive committee leadership; designated audit committee financial expert—supports board oversight of financial reporting and compensation .
- Director pay structure combines modest cash with annual RSUs; Laffer’s 2024 mix: $27,500 cash and time-based RSUs valued at $66,410, aligning compensation partly with equity performance .
- Insider trading policy prohibits hedging/shorting by directors, supporting alignment .
-
Conflict considerations and risk indicators
- Externally managed structure: Compensation Committee (chaired by Dr. Laffer) reviews the Management Agreement and Manager performance while numerous material related‑party dealings exist across the NexPoint platform (fee to manager $3.9M in 2024; extensive affiliate transactions including NexBank loan, dealer-manager fees on Series B Preferred, NSP guarantees, IQHQ participation, and intercompany loans). This concentration creates persistent perceived conflicts and heightens the need for robust independent oversight .
- Audit “overboarding” consideration: The board explicitly determined that simultaneous service on more than three public company audit committees by certain members (including Dr. Laffer) would not impair effectiveness—a potential overboarding flag for some investors despite the board’s determination .
- Ecosystem interlocks: Dr. Laffer sits on affiliate boards (NXRT, NXDT, NXHT, VineBrook), increasing perceived entanglement with the Manager and related-party ecosystem .
- Say-on-pay: Not on the 2025 ballot; only director elections and auditor ratification were proposed—reduces a recurring channel for shareholder feedback on compensation governance .
RED FLAGS
- Externally managed REIT with material affiliate transactions, while the Compensation Committee chaired by Dr. Laffer oversees the Manager arrangements .
- Board’s tolerance for multiple concurrent audit committee seats (potential overboarding risk) .
- Extensive platform interlocks across NexPoint affiliates (independence perception risk despite NYSE determination) .
Notes on attendance and engagement:
- Board met five times in 2024; Dr. Laffer met the ≥75% attendance threshold (only Mr. Dondero fell below), and each committee on which he serves met five times, indicating regular engagement cadence .
Scope limits:
- No per-director annual meeting attendance detail was disclosed; company notes “all but two” directors attended the 2024 annual meeting .
- No director-specific ownership guidelines, pledging by Dr. Laffer, or clawback policies for directors were disclosed; hedging and shorting prohibitions are in the code of ethics .