D.C. Sauter

About D.C. Sauter

D.C. (Dennis Charles) Sauter, Jr., age 50, is General Counsel (since February 2020) and Corporate Secretary (since January 2025) of NexPoint Real Estate Finance, Inc. (NREF). He also serves as General Counsel of several NexPoint-affiliated REITs and the Sponsor, with 24 years of legal experience focused on complex real estate transactions; education includes a B.A. from the University of Texas at Austin and a J.D. from SMU Dedman School of Law; licensed in Texas since 2001 . NREF is externally managed; executive officer pay is primarily equity-based RSUs with no company-paid cash compensation, and equity awards are time-based rather than linked to operational metrics like revenue/EBITDA, so TSR or financial growth alignment is via overall equity value rather than explicit performance plans .

Past Roles

External Roles

Fixed Compensation

• External management model: NREF’s named executive officers (and other officers) are employed by the external Manager; the Company does not pay cash compensation, pension, perquisites, or deferred comp to executive officers. Compensation committee approves only company equity awards (RSUs) when granted; no company cash salary or bonus is disclosed for officers .
• Clawback policy: Adopted November 2023 for incentive-based compensation in case of an accounting restatement; no clawbacks required for the prior immaterial revision event (Elysian) because the recovery period preceded the rule’s effective date .

Performance Compensation

• Equity instruments: NREF states it does not grant stock options; equity compensation is primarily restricted stock units (RSUs) with time-based vesting; committee avoids timing awards around MNPI and typically grants annually post-10-K filing .
• Vesting economics for officers’ awards (plan-level terms):
  • Termination due to death, disability, retirement: All outstanding RSUs vest .
  • For awards granted prior to 2024: Termination without cause or for good reason → all outstanding RSUs vest .
  • For awards granted in/after 2024: If terminated without cause, RSUs scheduled to vest in the next 12 months vest (subject to timely release) .
  • Change-in-control: If awards are not assumed/replaced, all outstanding awards vest; if replaced and termination without cause or for good reason occurs within two years post-CIC, all outstanding awards vest .

Note: No PSU (performance share) framework or explicit pay-for-performance metrics (e.g., revenue, EBITDA, TSR percentile) are disclosed for officers; equity awards are service-based .

Equity Ownership & Alignment

• Beneficial ownership: Proxy tables disclose beneficial ownership for directors and named executive officers; D.C. Sauter is an executive officer but not a named executive officer or director, and no individual ownership line is provided for him in the tables .
• Hedging policy: Insider trading policy prohibits directors and certain employees, including all executive officers, from hedging transactions (options, warrants, puts, calls, short sales) in company securities .
• Pledging: Pledging disclosures are provided for some insiders (e.g., James Dondero, Brian Mitts) but there is no pledging disclosure specific to D.C. Sauter in the proxy .

Employment Terms

• Employment relationship: Officers are employed by the external Manager; company-level severance multiples or cash severance are not disclosed because the Company does not pay cash compensation to officers .
• Change-of-control and termination mechanics: RSU acceleration terms apply to “officers” as outlined (single-trigger if awards not assumed; double-trigger within two years if replaced awards and subsequent termination without cause/for good reason) .
• Ownership guidelines/tax gross-ups/non-compete: No officer-specific stock ownership guidelines, tax gross-ups, or non-compete/non-solicit terms are disclosed for D.C. Sauter in the proxy. The Company does disclose general related-party, conflicts, and allocation policies related to the external Manager structure .

Investment Implications

• Pay-for-performance alignment: With RSUs time-based and no disclosed performance share metrics, compensation alignment hinges on long-term equity value rather than short-term financial targets; this reduces discretionary or “goal-post” risks but provides lower direct linkage to operational KPIs .
• Retention risk: RSU acceleration for death/disability/retirement and selective acceleration for terminations and change-in-control events can mitigate retention risk; post-2024 awards have 12-month forward vesting on termination without cause, lowering cliff risk for officers .
• Trading signals: Monitor 8-K Item 5.02 for officer changes and plan amendments; recent CFO transition was disclosed via 8-K, with reaffirmed principal officer designations—similar filings would surface any changes affecting legal leadership or RSU terms .
• Governance/related-party overlays: External management and extensive affiliate activities introduce conflict-management needs; committee oversight and related-party policies are in place, but investors should watch cross/principal transactions and equity financing incentives that can influence fee bases and share issuance (potential dilution) .

Overall: D.C. Sauter’s role is legal and governance execution across NexPoint REITs, with compensation primarily via RSUs governed by company plan terms; absence of company-paid cash and performance-based equity reduces incentive cyclicality, while plan-level double-trigger CIC protection and 12‑month forward vesting on no-cause terminations support retention but limit pure performance alignment .