Paul Richards
About Paul Richards
Paul Richards, age 36, is NXRT’s Chief Financial Officer, Executive VP–Finance, Treasurer and Assistant Secretary, serving as principal financial and principal accounting officer effective January 1, 2025; he leads financial reporting and accounting and is integral to financing and capital allocation decisions . His background spans finance and asset management roles across NexPoint affiliates (VineBrook, NXDT, NREF, NHT) and prior experience in product strategy at NexPoint Asset Management and tax consulting at Deloitte; education credentials are not disclosed in NXRT’s proxy . NXRT’s pay-for-performance framework emphasizes equity-based awards and shareholder returns; company TSR context shows $100 invested in NXRT equaled $107 in 2024 versus $119 for the MSCI U.S. REIT Index, alongside net income of $1.1 million, though the company states it does not use specific financial performance measures to link compensation to performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NexPoint Asset Management, L.P. | Product Strategy Associate | 2016–2017 | Evaluated/optimized registered product lineup |
| VineBrook Homes Trust, Inc. | VP Asset Management & Financing | 2018–Aug 2024 | Asset management and financing leadership |
| NexPoint Real Estate Finance, Inc. (NREF) | VP Originations & Investments | Feb 2020–Jan 2025 | Originations/investments leadership |
| NexPoint Hospitality Trust (NHT) | VP Asset Management | Mar 2019–Dec 2024 | Asset management leadership |
| Deloitte & Touche LLP | Tax Consultant (State & Local Tax) | Not disclosed | Strategic tax reviews, VDAs, compliance |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sponsor (NexPoint Advisors/NREA) | Director | Since 2019 | Governance across sponsor platform |
| VineBrook Homes Trust, Inc. | CFO, Assistant Secretary & Treasurer | Since Aug 2024 | Financial leadership, treasury |
| NXDT (Diversified REIT) | CFO, EVP–Finance, Treasurer & Assistant Secretary | Since Jan 2025 | Finance and capital allocation |
| NREF (Commercial Mortgage REIT) | CFO, EVP–Finance, Treasurer & Assistant Secretary | Since Jan 2025 | Finance and capital allocation |
| NHT (Hospitality REIT) | CFO & Corporate Secretary | Since Jan 2025 | Financial reporting and governance |
Fixed Compensation
NXRT is externally managed; named executive officers (including the CFO) do not receive cash compensation from NXRT, and NXRT does not have agreements with its named executive officers regarding cash compensation. Salaries and bonuses (if any) are determined and paid by the Adviser and its affiliates, not NXRT .
| Component | Disclosure | Notes |
|---|---|---|
| Base Salary | Not disclosed by NXRT | Paid by Adviser; NXRT provides no cash salary |
| Target Bonus % | Not disclosed by NXRT | Determined by Adviser |
| Actual Bonus Paid | Not disclosed by NXRT | Determined/paid by Adviser |
| Perquisites | Not disclosed by NXRT | NXRT does not detail executive perqs; externally managed context |
Performance Compensation
NXRT does not grant stock options and primarily uses time-based RSUs; for 2024, one RSU grant was made to each named executive officer that vests ratably over five annual installments, with one-fifth vesting on March 13, 2025. The compensation committee does not use a specific formula or explicit performance metrics to determine award sizes; awards aim to align executives with dividends and market cap growth consistent with REIT constraints .
| Incentive Type | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| RSUs (Time-Based) | None specified | N/A | N/A | N/A | RSU grant value set by committee | 5 equal annual installments; 2024 grants vested 1/5 on Mar 13, 2025 |
Notes:
- Committee may grant performance-based awards under the LTIP (e.g., performance shares/units), but recent practice was time-based RSUs; no options are granted .
- Awards are typically granted after filing the Form 10‑K and when no MNPI exists .
Equity Ownership & Alignment
- Beneficial ownership for Paul Richards is not listed in the proxy’s beneficial ownership table as of February 25, 2025; table lists certain executives/directors (Dondero, Mitts, McGraner, Sauter, etc.) and major holders .
- Pledging: Proxy footnotes disclose pledging for certain holders (e.g., Dondero-related trust pledges; McGraner pledged 25,007 shares) but do not disclose any pledging for Paul Richards .
| Item | Paul Richards | Source |
|---|---|---|
| Total beneficial ownership (shares) | Not disclosed | |
| Ownership % of shares outstanding | Not disclosed | |
| Vested vs. unvested shares | Not disclosed | |
| Options (exercisable/unexercisable) | No options program | |
| Shares pledged as collateral | Not disclosed for Richards | |
| Stock ownership guidelines | Not disclosed |
Employment Terms
| Term | Provision | Source |
|---|---|---|
| Appointment & Role | CFO, EVP–Finance, Treasurer & Assistant Secretary; principal financial and principal accounting officer effective Jan 1, 2025 | |
| Agreements | NXRT has no cash comp agreements with named executive officers; externally managed | |
| Clawback | LTIP includes clawback provisions | |
| Change in Control | Double‑trigger CoC vesting under 2025 LTIP governance; accelerated vesting if awards not assumed; if assumed and terminated without cause or for good reason within two years post‑CoC, all outstanding unvested awards vest | |
| RSU Acceleration (Death/Disability/Retirement) | All unvested RSUs vest | |
| RSU Acceleration (Termination Without Cause) | For 2021 awards: full vest; for 2022+ awards: vests RSUs scheduled to vest in the 12 months post-termination, subject to release | |
| Good Reason Definition | Material diminution of duties; material reduction in aggregate salary/bonus opportunity; reassignment >50 miles; cure and timing conditions apply | |
| Cause Definition | Material breach of agreement; felony; gross negligence/misconduct; abandonment; willful failure to perform after notice/opportunity to cure | |
| Tax Gross‑Ups | No excise tax gross‑ups in connection with CoC | |
| Option Repricing | Prohibited without shareholder approval | |
| Non‑compete/Non‑solicit | Not disclosed | — |
Additional Context and Governance Considerations
- NXRT’s external management structure creates potential conflicts of interest (e.g., asset-based fees incentivizing leverage/assets under management; shared activities and cross‑transactions with affiliates); conflicts are acknowledged with policies around allocation, cross/principal transactions, and MNPI handling .
- Equity program dilution metrics: Burn rate averaged 0.98% (2022–2024); overhang ~2.22% excluding the requested 2025 LTIP share reserve; proposed 2025 LTIP share reserve is 976,000 shares (estimated market value ~$37.9M at $38.86 on Mar 24, 2025) .
Investment Implications
- Pay-for-performance alignment: Compensation is largely equity-based RSUs without explicit performance metrics; while this aligns executives with share price/dividend outcomes, the lack of defined performance hurdles reduces direct pay-versus-performance linkage .
- Vesting/selling pressure: RSUs vest in equal installments; 2024 awards vested on March 13, 2025—future grants often follow annual cycles post‑10‑K, creating potential calendar-driven liquidity windows; monitor Form 4s for Richards around annual vesting dates and grant timing .
- Governance mitigants: Double‑trigger CoC, clawback, prohibition on option/SAR repricing, and no excise tax gross‑ups are shareholder‑friendly features that temper risk in an externally managed framework .
- Retention and role load: Richards’ cross‑platform CFO responsibilities (NXRT, NXDT, NREF, NHT, VineBrook) indicate strong finance leadership but may create bandwidth/affiliation conflicts; RSU structure supports retention, though explicit employment/severance multiples are not disclosed .
- Pledging risk: No pledging disclosed for Richards; pledging exists for certain other insiders, warranting ongoing monitoring of insider collateralization practices .
Monitoring priorities: track equity award grants/vests (March cadence), insider Form 4 transactions, advisory agreement terms/renewals, dividend policy execution, leverage/financing decisions, and any changes to LTIP governance or conflict‑management policies .