Arthur Laffer
About Arthur Laffer
Arthur B. Laffer (age 84) has served as an independent director of NexPoint Residential Trust (NXRT) since May 2015. He is Chair of the Compensation Committee, a member of the Audit Committee (designated “audit committee financial expert”), and a member of the Nominating & Corporate Governance Committee; he is classified as independent under NYSE rules. Laffer is the founder and chairman of Laffer Associates, widely recognized for his role as the “Father of Supply‑Side Economics,” and previously served as Chief Economist at the U.S. Office of Management and Budget and as a professor at Pepperdine, USC, and the University of Chicago .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| U.S. Office of Management and Budget | First Chief Economist | Early 1970s | Advised national economic policy under George Shultz |
| President Reagan’s Economic Policy Advisory Board | Member | 1980s | National economic policy advisory |
| Pepperdine University | Distinguished University Professor; Board member | Prior | Academic leadership and governance experience |
| University of Southern California | Charles B. Thornton Professor of Business Economics | Prior | Academic expertise in economics |
| University of Chicago | Associate Professor of Business Economics | Prior | Academic expertise |
| MPS Group, Inc. | Director | Prior; sold to Adecco for $1.3B in 2009 | Oversight through successful sale |
| GEE Group, Inc. | Director | 2014–2020 | Public company board service |
External Roles
| Organization | Role | Since | Notes |
|---|---|---|---|
| NexPoint Real Estate Finance (NREF) | Director | Feb 2020 | Affiliate boards tied to NXRT’s sponsor |
| VineBrook | Director | Dec 2018 | Affiliate board |
| NexPoint Homes Trust (NXHT) | Director | Jun 2022 | Affiliate board |
| NexPoint Diversified Real Estate Trust (NXDT) | Trustee | Jul 2022 | Affiliate board |
| VerifyMe, Inc. | Director | Since 2019 | Public company board |
| 1065 Institute, Inc. | Secretary | Since 2017 | 501(c)(3) non‑profit governance |
Board Governance
- Committee memberships: Compensation (Chair), Audit (member, audit committee financial expert), Nominating & Governance (member) .
- Independence: Board determined Laffer independent under NYSE rules; independents meet in executive session .
- Meeting cadence and attendance: Board met 5 times in 2024; each director attended at least 75% of meetings and committees except the President (James Dondero), implying Laffer met the 75% threshold .
- Committee engagement: Audit Committee met 5 times; Compensation Committee met 5 times; Nominating & Governance met 5 times during 2024 .
- Lead Independent Director: Scott Kavanaugh; oversees executive sessions and board agenda and information flow .
Fixed Compensation
| Component | Amount | Notes |
|---|---|---|
| Annual director retainer (cash) | $20,000 | Standard non‑management director fee |
| Compensation Committee Chair fee (cash) | $7,500 | Laffer serves as Chair |
| Total Cash (2024) | $27,500 | As disclosed in Director Compensation Table |
Performance Compensation
| Grant Date | Award Type | Shares | Grant Date Fair Value | Vesting Schedule |
|---|---|---|---|---|
| March 13, 2024 | RSUs | 4,117 | $127,174 | Vested March 13, 2025 (one‑year cliff) |
- Structure: RSU grant fair value equals closing stock price on grant date (ASC 718); directors each held 4,117 RSUs as of Dec 31, 2024; no performance metrics disclosed for director equity (time‑based vesting) .
Other Directorships & Interlocks
| Company | Relationship to NXRT/Sponsor | Role | Governance Note |
|---|---|---|---|
| NREF, VineBrook, NXHT, NXDT | Affiliates of Sponsor/Company | Director/Trustee | Multiple affiliate board roles can increase interlocks and oversight complexity; Board deems Laffer independent |
| VerifyMe, Inc. | Unrelated public company | Director | Additional public company governance experience |
Expertise & Qualifications
- Audit committee financial expert designation; financially literate under NYSE rules .
- Founder and chairman of Laffer Associates; nationally recognized for supply‑side economics; prior senior U.S. economic policy advisory service .
- Academic credentials and prior professorships (Pepperdine, USC, University of Chicago) .
Equity Ownership
| Holder | Beneficially Owned Shares | % of Class | Notes |
|---|---|---|---|
| Arthur Laffer | 54,956 | <1% | Includes 4,117 shares issuable upon vesting of RSUs within 60 days after Feb 25, 2025; shares outstanding 25,466,105 as of Feb 25, 2025 |
- Pledging/hedging: No pledging disclosed for Laffer; Company insider trading policy prohibits hedging and short selling by directors and certain employees .
Governance Assessment
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Strengths:
- Independent director with deep economic and governance expertise; designated audit committee financial expert, enhancing financial oversight .
- Chairs the Compensation Committee; committee has sole authority to retain independent compensation consultants and advisors, supporting pay governance rigor .
- Director compensation mix is equity‑heavy (2024: $127,174 stock vs. $27,500 cash), aligning incentives with shareholder outcomes; RSUs vest after one year .
- Attendance met Board’s 75% threshold in 2024; full engagement across three key committees that each met five times .
-
Risks/RED FLAGS to monitor:
- Multiple affiliate board seats (NREF, VineBrook, NXHT, NXDT) increase interlocks within the NexPoint ecosystem; though the Board deems him independent, this structure heightens the need for strong disinterested committee oversight of affiliate transactions .
- NXRT’s external management model and documented related‑party transactions (NexBank banking, asset sale to NexBank, fiber agreements with affiliates) create inherent conflicts; policy requires disinterested Audit Committee approval, placing importance on independent director vigilance (including Laffer’s role on Audit) .
- Compensation Committee interlocks disclosure notes no relationships requiring related‑party disclosure and no cross‑committee interlocks, which is positive, but continued monitoring is prudent in an affiliate‑heavy structure .