Doug Jones
PennyMac Financial ServicesAbout Doug Jones
Doug Jones, age 68, is Director, President and Chief Mortgage Banking Officer at PennyMac Financial Services, Inc. (PFSI), and has served on the Board since March 1, 2023; he has led PFSI’s mortgage banking operations and previously held senior roles at Countrywide/Bank of America. He holds a B.A. in Economics from California State University, Sacramento . In Fiscal 2024, PFSI generated net income of $311.4 million and ROE of 8.5%, with a 17% increase in loan production volume to $116.3 billion and a 10% increase in servicing UPB to $665.8 billion, reflecting scale and balanced earnings across production and servicing . Book value per share rose to $74.54 (+6% YoY), and the quarterly dividend increased to $0.30, underscoring capital discipline and shareholder returns .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PFSI | Senior Managing Director & Chief Mortgage Banking Officer; Senior Managing Director & Chief Institutional Mortgage Banking Officer; Chief Institutional Mortgage Banking Officer; Chief Correspondent Lending Officer | 2011–2021 | Built and led multi-channel production and servicing operations; scaled correspondent and warehouse lending |
| Countrywide Financial / Bank of America (successor) | Senior executive roles including SVP Mortgage Banking; managing correspondent and warehouse lending, retail sales oversight | 1997–2011 | Led large-scale mortgage banking operations across channels; operational rigor and market share growth |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| PennyMac Mortgage Investment Trust (PMT) | Trustee, President & Chief Mortgage Banking Officer | Current | Dual-role within PFSI/PMT ecosystem; governance and operational oversight linkages |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $600,000 | $700,000 |
Notes: 2024 salary increased by $100,000; the Committee cited market benchmarking, with Jones’ base salary ranking below peer medians, emphasizing variable pay focus .
Performance Compensation
Annual Incentive Structure and Results (FY 2024)
| Component | Weight | Target | Actual | Payout % | Paid ($) |
|---|---|---|---|---|---|
| ROE | 70% | 15% ROE = 100% payout | 8.5% ROE | 52.6% component payout | — |
| Strategic Objectives | 30% | 100% payout at target | Achieved; Company strategic payout 150% | 150% component payout | — |
| Total Annual Incentive | 100% | Target $2,500,000 | — | 81.8% | $2,044,887 |
Strategic achievements included: second-largest U.S. mortgage producer; #1 correspondent (19.0% share) and #3 broker (4.1% share); servicing UPB to $666B; technology launches (Non-del+ via POWER+), operational efficiency gains, and dividend increase .
Long-Term Equity Awards (Granted Feb 29, 2024)
| Award Type | Grant Date | Number | Grant Date Fair Value ($) | Vesting | Key Terms |
|---|---|---|---|---|---|
| Performance RSUs (PSUs) | Feb 29, 2024 | 21,635 | $1,837,461 | 3-year cliff (2024–2026) | Metrics: ROE target 15%; leverage ratio multiplier; individual multiplier; max 300% payout |
| Time-based RSUs | Feb 29, 2024 | 10,817 | $918,688 | 3-year ratable annual vest | Settled in common stock upon vesting |
| Stock Options | Feb 29, 2024 | 27,044 | $1,010,634 | 3-year ratable; 10-year term | Exercise price $84.93; Black-Scholes $37.37/share |
PSU design changes in 2024 widened maximum ROE payout range to improve differentiation across market cycles and lowered maximum leverage ratio multiplier to 120% at ≤1.5x leverage, reinforcing prudent capital management . Notably, FY 2022 PSU awards failed to vest (0% payout) due to ROE under threshold, evidencing rigorous performance hurdles .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 776,127 shares (1.5% of outstanding as of 3/31/2025) |
| Ownership Breakdown | 450,000 shares via GR Family Investments; 15,337 via Jones Family Trust; 310,790 underlying options exercisable on/before May 30, 2025 |
| Shares Pledged as Collateral | None; “None of the shares have been pledged as security” |
| Executive Ownership Guidelines | CEO 5x base salary; other executive officers 3x base salary |
| Insider Trading/Anti-Pledging/Hedging | Policy restricts pledging, hedging, short sales, margin trading; robust governance practices |
Implications: Ratable RSU and option vesting schedules (2024–2027) and ~311K options already exercisable may create episodic supply; absence of pledging reduces alignment risk .
Employment Terms
| Term | Provision |
|---|---|
| Agreement Term | Jan 1, 2023 – Dec 31, 2026 |
| Role | President & Chief Mortgage Banking Officer (PFSI/PNMAC) |
| Incentive Eligibility | Annual cash + equity incentives per Compensation Committee targets; awards under 2013/2022 Equity Plans |
| Severance (Non-Cause/Good Reason/CoC Termination) | 2.5x base salary + 2.5x average bonus (last 2 years), paid over 24 months; pro-rata current year bonus; COBRA reimbursement; immediate vesting of unvested equity |
| Change of Control Treatment | Double-trigger (benefits if employment terminates “as a result of or in connection with” CoC); immediate vesting of equity |
| Death/Disability | Immediate equity vesting; options remain outstanding to 10th anniversary of grant; salary continuation (6 months for death) |
| Consulting (Post-Term) | $1.5M over ~18 months (monthly installments plus $500K at completion); ceases if engaging with competitor |
| Restrictive Covenants | Non-solicit of employees for 18 months post-termination |
| Tax & Aircraft | Up to $50,000/year reimbursement for tax/financial counseling; charter flights available for business |
| Arbitration & Excise Tax Cutback | JAMS arbitration; 280G excise tax “best-net” cutback if applicable |
Board Governance
- Board Service: Director since March 2023; management director (not independent) .
- Committee Roles: None (management directors do not serve on Board committees); Board maintains six principal committees led by independent directors .
- Independence and Leadership: 82% of directors independent; combined CEO/Chairman role with a Lead Independent Director (Jeffrey A. Perlowitz) through Feb 2028 .
- Attendance: Board held 15 meetings in FY 2024; all directors met at least 75% attendance thresholds .
- Director Compensation: Management directors (Jones, Spector) receive no Board fees; compensation provided via executive programs .
Say-on-Pay & Compensation Governance
- Say-on-Pay approval: 99.0% (2024), 82.6% (2023), 98.7% (2022) .
- Policies: Clawback for Section 16 officers/Senior Managing Directors; no single-trigger equity vesting upon CoC (if awards assumed); no excise tax gross-ups; prohibition on hedging/pledging; no option re-pricing; no SERP .
- Peer benchmarking and independent consultant: Pearl Meyer advises the Compensation Committee; annual peer review and risk assessment .
Investment Implications
- Pay-for-performance alignment: 2024 annual incentive paid at 81.8% with ROE below target (8.5% vs 15%); 2022 PSUs forfeited (0% payout), indicating rigorous targets and reduced windfalls—supportive of shareholder alignment .
- Retention and transition: Strong retention economics through 12/31/2026 with double-trigger CoC, immediate equity vesting on qualifying terminations, and paid consulting post-term; low near-term flight risk but note contract horizon as 2026 .
- Selling pressure: 3-year RSU/options vesting cadence and ~310,790 options already exercisable may create intermittent supply; anti-pledging/hedging mitigate misalignment risk .
- Dual-role governance: As an executive director with no committee roles and a majority independent board/lead director structure, governance checks exist; nonetheless, combined CEO/Chair and executive directorships warrant continued monitoring of independence practices .
- Scale execution: Strategic achievements (market share leadership; tech/efficiency; servicing growth; dividend increase; book value growth) underscore Jones’ operational execution, but macro rate sensitivity remains a performance lever impacting ROE-based pay outcomes .