Daniel S. Perotti
About Daniel S. Perotti
Senior Managing Director and Chief Financial Officer of PennyMac Mortgage Investment Trust (PMT) since January 1, 2021; previously Deputy CFO (2017–2020) and Chief Asset & Liability Management Officer at PMT/PFSI since 2009. Prior experience at BlackRock (2002–2008) leading quantitative research within BlackRock Solutions; B.A. in Economics and Computer Science from Columbia University; age 44 . Executive responsibilities include oversight of accounting and financial reporting, treasury, investor relations, FP&A, tax analysis, and Sarbanes–Oxley compliance . Pay-for-performance at PMT emphasizes ROE and relative TSR in PSU awards; 2024 measured ROE was 8.4% with 2024 PSU payout of 80.1% on ROE/TSR components, evidencing alignment to company performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PMT/PFSI | Deputy CFO; Chief Asset & Liability Management Officer; other executive roles | 2009–2020 | Built finance and ALM capabilities; supported externally managed REIT model and mortgage banking operations |
| PMT | Chief Financial Officer | 2021–present | Oversees reporting/treasury/IR/FP&A/tax/SOX; central to execution and capital markets communication |
| BlackRock | Head of Quantitative Research (BlackRock Solutions) and other roles | 2002–2008 | Advanced risk/analytics; foundational quantitative expertise applied to mortgage finance |
External Roles
- No external directorships or committee roles for Mr. Perotti are disclosed in PMT’s proxy .
Fixed Compensation
- PMT does not pay base salary or cash bonus to named executive officers; compensation is equity-only under PMT’s 2019 Plan .
- PFSI (manager/affiliate) paid Mr. Perotti in 2024: salary $470,833; non‑equity incentive $1,145,137; stock awards $1,274,969; option awards $467,499; other comp $49,740; total $3,408,178 .
Performance Compensation
PMT Equity Awards Structure and Metrics (2024 awards)
- Mix: Performance-based RSUs (PSUs) 55%; Time-based RSUs 45% .
- PSU metrics and weightings: ROE (50%) and Relative TSR vs peer group (50%) with three one-year performance periods; ROE threshold 6% (50% payout), target 8% (100%), max 12% (200%); Relative TSR threshold <20th percentile (0%), 20–40th (50%), 40–60th (100%), 60–80th (150%), ≥80th (200%) .
- 2024 actual: ROE 8.4% and TSR 33.3%; PSU payout 80.1% for 2023 and 2024 awards (component math reflects ROE ≈110.2% and TSR 50%) .
| Metric | Weighting | Target | Actual (2024) | Component Payout | Vesting Terms |
|---|---|---|---|---|---|
| Return on Equity (ROE) | 50% | 8.0% cumulative annualized ROE | 8.4% | 110.2% | Annual measurement over FY2024–FY2026; three-year schedule with annual tranches |
| Relative TSR (percentile vs peer group) | 50% | 40–60th percentile | TSR = 33.3% | 50.0% | Annual measurement; three-year schedule with annual tranches |
| Total PSU payout (2024 measurement) | — | — | — | 80.1% | As above |
PMT Grants of Plan-Based Awards (FY2024)
| Grant Type | Grant Date | Threshold (shares) | Target (shares) | Maximum (shares) | Grant-Date Fair Value ($) |
|---|---|---|---|---|---|
| PSU (Perotti) | 3/12/2024 | 9,575 | 19,150 | 38,300 | $274,994 |
| RSU (Perotti) | 3/12/2024 | — | — | — | $224,992 |
PMT Stock Vested in FY2024
| Category | Shares Vested | Value Realized ($) |
|---|---|---|
| Total (PSUs + RSUs) | 27,856 | $388,725 |
| PSUs (component) | 15,906 | $223,797 |
| RSUs (component) | 11,950 | $164,928 |
Equity Ownership & Alignment
- Beneficial ownership: 99,654 common shares held via The Perotti Family Trust; none of his shares are pledged as collateral .
- Shares outstanding: 87,010,608 (as of March 31, 2025) ; Perotti’s ownership ≈ 0.1146% of outstanding (99,654 ÷ 87,010,608) .
- Unvested equity outstanding (as of 12/31/2024):
- RSUs unvested: 15,668 (2024 grant) + 11,512 (2023 grant) + 3,832 (2022 grant) = 31,012 RSUs .
- PSUs unearned (shown at target/actual): 19,150 (2024 grant, target) + 14,070 (2023 grant, target) + 5,160 (2022 grant, actual 110.2%) .
- Market value markers (12/31/2024 closing price $12.59): RSU blocks and PSU blocks carried at $12.59 for unearned/unvested presentations .
- Ownership guidelines: Executives (other than CEO) must hold $500,000 of PMT shares/RSUs; executives with ≥5 years in role are in compliance per annual review . PMT prohibits pledging, margin, short sales, and hedging of company securities .
Employment Terms
- No employment agreements with named executive officers; PMT does not provide cash severance; and PMT is not required to make payments upon a change in control .
- Clawbacks: SEC-compliant recovery policy adopted September 2023 covering incentive compensation for current/former Section 16 officers for three completed fiscal years preceding a restatement; separate clawback policy for Senior Managing Directors since 2018 .
- Change-of-control vesting:
- PSUs: Full vesting upon termination not for cause or termination of management agreement not for cause; change-in-control provides full vesting if shares cease public trading, otherwise double-trigger or pro‑rata if performance goals met; remaining PSUs may convert to time-based RSUs post‑CIC unless comparable performance goals can be determined .
- RSUs: Full vesting upon retirement (pro‑rata if >9 months outstanding), termination not for cause/death/disability, or termination of management agreement not for cause; CIC provides full vesting if shares cease public trading or upon double‑trigger termination not for cause tied to CIC .
- Vesting cadence: RSUs vest ratably in three annual installments starting on the one-year anniversary of grant; PSUs measured annually with three one-year periods and vest annually subject to achievement and service .
Compensation Structure Analysis
- PMT equity-only compensation (no salary/bonus from PMT) concentrates pay at risk with PSU/RSU mix; PMT increased FY2024 ROE max performance threshold to 12% and max vesting to 200%, tightening pay-for-performance versus FY2023 (max 10%, 150%) .
- PSU design uses two performance metrics (ROE and relative TSR), consistent with shareholder feedback; TSR as a peer-relative measure reduces payouts when underperforming peers even with acceptable ROE, evidenced by 2024 PSU payout of 80.1% .
- PFSI compensation skewed to variable pay: approximately 87% variable for non-CEO named executives in FY2024; annual incentives weighted 70% to ROE and 30% to strategic objectives with overall payout 81.8% reflecting ROE of 8.5% .
Governance, Peer Benchmarking, and Say‑on‑Pay
- Compensation Committee: Renee R. Schultz (Chair), Nancy McAllister, Stacey D. Stewart; all independent .
- Independent compensation consultant: Pearl Meyer engaged by Committee; scope includes peer group, target award levels, market data, risk assessment, and CD&A support; no conflicts identified .
- Executive compensation peer group expanded to include AGNC, Annaly, and Dynex; broader mortgage REIT set used to benchmark market cap/assets/complexity .
- Say‑on‑Pay support: approximately 98% approval at 2022–2024 annual meetings; 2024 vote results disclosed and considered in program design .
Equity Ownership & Alignment Table
| Item | Detail |
|---|---|
| Beneficial shares owned | 99,654 (Perotti Family Trust) |
| Shares outstanding (for % calc) | 87,010,608 (as of 3/31/2025) |
| Ownership % of outstanding | ≈0.1146% (99,654 ÷ 87,010,608) |
| Shares pledged | None of the shares in officer/trustee table are pledged |
| Ownership guideline | $500,000 for executives (non‑CEO); five‑year compliance window; executives ≥5 years are in compliance |
| Anti‑pledging/hedging policy | Prohibits hedging, pledging, short sales, margin accounts; trading pre‑clearance and windows required; Rule 10b5‑1 plans allowed with pre‑approval |
Multi‑Year PMT Compensation (Equity Grants Reported by PMT)
| Year | PMT Stock Awards ($) |
|---|---|
| 2022 | $399,988 |
| 2023 | $499,987 |
| 2024 | $499,986 |
Outstanding Equity Awards (as of 12/31/2024)
| Grant | Shares/Units Not Vested | Notes |
|---|---|---|
| RSUs (3/12/2024) | 15,668 | Vests ratably over three years |
| RSUs (2/28/2023) | 11,512 | Vests ratably over three years |
| RSUs (2/25/2022) | 3,832 | Vests ratably over three years |
| PSUs (3/12/2024) | 19,150 (target) | 2024–2026 performance; ROE/TSR |
| PSUs (2/28/2023) | 14,070 (target) | 2023–2025 performance; ROE/TSR |
| PSUs (2/25/2022) | 5,160 (actual 110.2%) | 2022–2024 performance; attained 110.2% |
Employment Terms Summary
- No PMT employment agreements; no PMT cash severance; vesting acceleration for RSUs/PSUs under retirement, disability/death, termination not for cause, management agreement termination not for cause, and defined change-of-control scenarios (often double-trigger unless shares cease public trading) .
Risk Indicators & Red Flags
- Hedging/pledging prohibited, and proxy discloses no pledging of shares among officers/trustees — positive alignment .
- No severance cash protections; equity acceleration terms exist — retention depends on ongoing equity value and performance attainment .
- Option re‑pricing prohibited under equity plan — governance positive .
- High say‑on‑pay support (≈98%) — low investor controversy on compensation .
Investment Implications
- Alignment: PMT’s equity‑only awards and PSU metrics (ROE and relative TSR) tie Perotti’s realized comp to shareholder outcomes; 2024 PSU payout of 80.1% reflects balanced discipline when peer‑relative TSR underperforms despite solid ROE .
- Retention/pressure: Significant unvested RSU/PSU stack and anti‑pledging/hedging reduce forced‑selling risk; annual vesting tranches typically around February–March and grant anniversaries may create predictable supply windows but sales to cover taxes, if any, are not disclosed here .
- Governance: No cash severance/change‑in‑control payments, strong clawbacks, and robust ownership guidelines indicate shareholder‑friendly design; program is reviewed against an expanded mortgage REIT peer set with independent consultant support and consistently strong say‑on‑pay results .
- Execution risk: Performance levers emphasize ROE and peer‑relative TSR; in a higher‑rate environment, sustaining ROE above 8% target and improving TSR percentile within the peer group are critical for PSU payouts and executive retention value .