Edward Constantino
About Edward Constantino
Edward Constantino, age 78, is an independent director of NexPoint Residential Trust, Inc. (NXRT) and has served on the Board since March 2015; he is designated an audit committee financial expert and currently chairs the Audit Committee, reflecting over 40 years of audit, advisory, and tax experience at Arthur Andersen LLP and KPMG where he led real estate and asset management audit practices before retiring in 2009 . He is a licensed CPA (AICPA and NYSSCPA) and holds external board roles at Patriot National Bancorp (since 2010), ARC Trust, Inc., ARC Trust III, Inc., and St. Francis College (Finance & Investment Committee) . The Board has determined he is independent under NYSE rules .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Arthur Andersen LLP | Audit, advisory, and tax practitioner | Not disclosed; part of 40+ years aggregate experience | Built deep real estate audit expertise |
| KPMG | Audit partner; in charge of real estate and asset management businesses; retired | Retired late 2009 | Led real estate and asset management audit practices |
| Skadden, Arps, Slate, Meagher & Flom LLP | Consultant | Not disclosed | Provided advisory support to leading law firm |
External Roles
| Organization | Role | Tenure/Notes |
|---|---|---|
| Patriot National Bancorp, Inc. | Director | Since 2010 |
| ARC Trust, Inc. | Director; Audit Committee Chair | Current |
| ARC Trust III, Inc. | Director; Audit Committee Chair | Current |
| St. Francis College (Brooklyn Heights, NY) | Trustee; Finance & Investment Committee member | Current |
Board Governance
- Committees: Audit (Chair), Compensation (Member), Nominating & Corporate Governance (Member) .
- Independence: Determined independent under NYSE rules (alongside Kavanaugh, Laffer, Swain, and Wood) .
- Board/Committee activity: Board met five times in 2024; each director attended at least 75% of Board and committee meetings except the President/Chairman; audit, compensation, and nominating committees each met five times in 2024 .
- Board leadership: Chairman is President James Dondero; Lead Independent Director is Scott Kavanaugh; independent directors hold regular executive sessions .
- Anti-hedging: Insider trading policy prohibits hedging and short sales by directors and certain employees .
Fixed Compensation
| Component | Amount | Detail |
|---|---|---|
| Annual cash retainer | $20,000 | Standard non-management director fee |
| Audit Committee Chair fee | $15,000 | Chair premium |
| Total cash fees (2024) | $35,000 | Sum of retainer and chair fee |
| RSU grant (2024) | $127,174 | Granted March 13, 2024; vested March 13, 2025; grant-date fair value based on closing price |
Performance Compensation
- Non-employee director awards are time-based RSUs; the March 13, 2024 grant vested after one year on March 13, 2025 (no disclosed performance conditions for director equity) .
- 2025 LTIP governance features: minimum one-year vesting; double-trigger change-in-control vesting; clawback; no repricing; no dividends on unvested awards; non-employee director annual cap of $350,000; no tax gross-ups on change-in-control .
| Performance Metric | Applicability to Edward Constantino (2024/2025) | Notes |
|---|---|---|
| Company-defined “Management Objectives” | Not applied to director RSUs; plan permits use for certain award types | Plan allows performance shares/units/cash incentives with measurable objectives; director equity remained time-based |
Other Directorships & Interlocks
| Company | Role | Interlock Type | Notes/Risk Considerations |
|---|---|---|---|
| NexPoint Real Estate Finance, Inc. (NREF) | Director | Affiliate | Shared adviser/affiliate relationships; externally managed structure creates potential conflicts |
| VineBrook Homes Trust, Inc. | Director | Affiliate | Affiliate board overlap; adviser-related interlocks |
| NexPoint Diversified Real Estate Trust (NXDT) | Trustee | Affiliate | Affiliate oversight; external management |
| NexPoint Homes Trust, Inc. (NXHT) | Director | Affiliate | Affiliate board overlap |
| Patriot National Bancorp, Inc. | Director | Unaffiliated | External financial services board |
| ARC Trust, Inc.; ARC Trust III, Inc. | Director; Audit Chair | Unaffiliated | Independent boards; audit leadership |
| St. Francis College | Trustee | Non-profit | Finance & Investment Committee member |
- NXRT discloses broad potential conflicts from overlapping advisory relationships and affiliate transactions, including incentivization from asset-based fees and leverage, and constraints from possession of MNPI; these create governance scrutiny points for independent directors on related-party oversight .
Expertise & Qualifications
- Designated audit committee financial expert; financially literate under NYSE rules; chairs Audit Committee .
- Licensed CPA; member of AICPA and NYSSCPA; deep real estate audit leadership background at KPMG and Arthur Andersen .
Equity Ownership
| Metric (as of Feb 25, 2025 unless noted) | Amount | Notes |
|---|---|---|
| Beneficially owned shares | 46,327 | Includes RSUs vesting within 60 days |
| Ownership % of outstanding | <1% (approx. 0.18%) | Outstanding shares reference (25,466,105) indicates “<1%”; table marks asterisk for <1% |
| RSUs vesting within 60 days | 2,058 | Included in beneficial ownership |
| Pledged shares | None disclosed for Constantino | Footnotes list pledging for other insiders; not for Constantino |
| Director RSUs outstanding (12/31/24) | 4,117 | For each non-management director; annual cycle |
Governance Assessment
- Strengths:
- Long-tenured independent director with CPA credentials and audit leadership; Audit Committee Chair and SEC-defined financial expert enhance board oversight of financial reporting and risk (including cybersecurity) .
- Documented independent status and regular committee activity; board-level structures include majority voting policy and independent executive sessions, improving accountability .
- Director equity uses time-based RSUs aligned with shareholder interests; 2025 LTIP embeds clawback, double-trigger, vesting minimums, and caps on director compensation, reducing pay-risk asymmetry .
- Anti-hedging policy prohibits hedging/shorting by directors, supporting alignment .
- Watch items / potential red flags:
- Externally managed REIT model and extensive affiliate overlaps (NREF, VineBrook, NXDT, NXHT) create structural conflicts (asset-based fees tied to AUM/leverage, MNPI constraints, shared relationships), raising oversight demands on independent directors .
- Related-party transactions approved by Audit Committee include fiber internet agreements (entity under common control with Adviser; separate agreement with entity controlled by an NXRT officer), normal banking at affiliate NexBank, and a 2024 property sale to NexBank Capital (affiliate), warranting continued scrutiny for terms and fairness .
- Board chair/President dual role and noted attendance exception for the President underscores the importance of Lead Independent Director and committee effectiveness; continued vigilance on meeting participation and oversight remains prudent .
Say-on-Pay context: NXRT’s 2024 advisory vote on NEO compensation passed with 83% of votes cast, indicating general shareholder support for pay programs in the externally managed structure .